Your opinion on Contact Energys fixed price "offer"

Forums › Home Workshop DIY › Your opinion on Contact Energys fixed price "offer"

illicit

553 posts

Ultimate Geek

#192382 9-Mar-2016 00:35

So..... I received the following email:

Dear Customer

Electricity prices are changing but you have a choice how the changes affect you

From 1 April 2016, the price you pay for your electricity at XXX address will change. This is because your local network company is changing the price they charge to transport electricity from the grid to your place. Contact is not making any changes to the energy and service components of your price (the parts that we have control over). Apart from reflecting the network changes, our prices are only adjusted to include an amount for the average prompt payment discount. Your new prices are shown below.

Lock in price certainty with our fixed plan

Let us know by 20 March 2016 that you want to sign up to our ‘fixed plan’, and the price you are on now will stay the same until the end of 2017 with a 20% discount when you pay your bill on time, or a 23% discount if you have both electricity and natural gas with us. (Terms and conditions apply, and there are limited circumstances in which prices may change.)

And there's more...We'll also put 100 Fly Buys bonus points into your Fly Buys account if you choose the fixed plan which you can put towards your next reward.

Click here or give us a call on 0800 266 861 to see the full terms and conditions or to sign up to the fixed plan.

Changes to your current pricing plan

Current Rates
(excl. GST and before your
prompt payment discount)

Daily Charge Under 15kVA LCA = $1.868 /day

Anytime = 20.175 cents/kWh

Economy = 19.952 cents/kWh

Electricity Authority Levy = 0.16 cents/kWh

Current Rates
(excl. GST and before your
prompt payment discount)

Daily Charge Under 15kVA LCA = $1.932 /day

Anytime = 21.202 cents/kWh

Economy = 20.979 cents/kWh

Electricity Authority Levy = 0.16 cents/kWh

Any other charges and benefits that apply in relation to your supply remain the same.

After some VERY rough calculations....

Going by the stats on here the average household increase would be approx $59 if you didn't sign up to Contact for the 21 months of their Fixed Plan.

If you do sign up for the fixed plan they also give you 100 flybuys points = $16 worth.

Total: $59 + $16 over 21 months = $75 ($3.50/month average)

However its a $150 early termination fee.....

Have I worked that out right?

If so - why do you think Contact would cover the electricity transport costs (approx $75 per customer)?
Just to retain them or is electricity expected to get cheaper in the next 21 months?

or....?

Aredwood

3885 posts

Uber Geek

#1508564 9-Mar-2016 00:45

Is Flick electric available in your area? They were slot cheaper than my previous fixed term with Contact. Also does the fixed price offer cover the lines charges?
Or will an increase get passed to you?

Jase2985

13459 posts

Uber Geek

ID Verified

Lifetime subscriber

#1508591 9-Mar-2016 05:23

We locked in with contact for a couple of years. Every company thats called trying to get us to switch has said they couldnt match what we are paying.

We did look at flick, but the numbers didnt stack up and we wouldnt have been saving much

sbiddle

30853 posts

Uber Geek

Retired Mod

Trusted

Biddle Corp

Lifetime subscriber

#1508598 9-Mar-2016 07:22

The electricity market is right up there with Internet when it comes to customer churn as it's so incredibly competitive. They'll do pretty much anything to keep you.

noroad

949 posts

Ultimate Geek

Trusted

#1508600 9-Mar-2016 07:28

Powershop is the Flip/Bigpipe power equivalent, I would not go back to an old school supplier after using Powershop.

SATTV

1648 posts

Uber Geek

ID Verified

#1508603 9-Mar-2016 07:39

sbiddle:

The electricity market is right up there with Internet when it comes to customer churn as it's so incredibly competitive. They'll do pretty much anything to keep you.

I found the opposite, We got a letter from Mercury saying if we didn't respond by the 6th of March we were going to locked to a 2 year contract, pay higher unit charges, and if we want to change within the 2 year contract period there was a $150 break fee.

The rates they gave us in the letter was a couple of cents higher than published online. New customers also got $150

I called Mercury energy twice, asked to speak to customer retention and we were looking at moving, been with you guys for 12 years what can you offer us to stay.

Nothing - just the published rates online, that was it.

I then decided to go with Power Shop. Cheaper rates, $150 joining credit and a promise to save at least $150 per year and they will credit the difference if we don't.

John

I know enough to be dangerous

Hammerer

2476 posts

Uber Geek

Lifetime subscriber

#1508615 9-Mar-2016 08:13

SATTV:

We got a letter from Mercury saying if we didn't respond by the 6th of March we were going to locked to a 2 year contract, pay higher unit charges, and if we want to change within the 2 year contract period there was a $150 break fee.

Are you sure that you don't have to confirm you want to commit to the new rates? It is normal to have to enter a code on the website or send in a response form before Mercury changes you to a fixed term contract.

It would be good if people said which electrical supply region they are in because that affects the pricing and competitive response of each company. If they want more customers in an area then they are more likely to offer a winning deal.

For example, our price offer and current rates from Mercury are both cheaper than the Contact offer in the original post. We're in the Hutt Valley

Clima

130 posts

Master Geek

Lifetime subscriber

#1509814 9-Mar-2016 12:29

I had a similar letter from Mercury earlier this year. Due to rising costs they had to increase rates. They were apparently prepared to make a loss on me and hold the lower rate if I stayed 2 years.

I looked at several others and they were all charging very similar rates. Meridian offered 15 % discount, $100 of the next bill and a $150 Prezzy Card (now $100 card) for 2 year contract. I am a low user (about 520 unit/month) so the extra 5% discount (Mercury is 10%) is worth about $8/month - $192/2yr. This means a total saving of about $440 for 2 years contract.

Contact offered 20% discount plus $100 for 2 years contract. A total saving of about $480 for 2 year contract.

I checked back with Mercury as I have been with them for 'years' - probably they took over when Auckland Electric Power Board ceased. Mercury offered no incentive to stay !! Bye Bye

Sharesies kids

Free kids accounts - trade shares and funds (NZ, US) with Sharesies (affiliate link).

hairy1

3332 posts

Uber Geek

ID Verified

Trusted

Lifetime subscriber

#1509821 9-Mar-2016 12:38

We had the same from Mercury. Our cheap prices were coming to an end. Mercury couldn't match it. Ended up going with Nova. No Flick available for us.

Electricity retailing is an interesting game.

My electricity is exactly the same from every retailer, the lines company fixes the problems and I can't choose them.

There are some features such as Mercury Energy GEM etc. but in reality the only thing to differentiate retailers in the end is price.

Cheers, Matt.

My views (except when I am looking out their windows) are not those of my employer.

tchart

2379 posts

Uber Geek

ID Verified

Trusted

#1509823 9-Mar-2016 12:45

We got a similar letter from Mercury 2 weeks ago. We've just moved house so I just wanted it to be as easy as possible so I've stuck with Mercury for now (I didnt fix with them). We are looking at moving over to Flick though once I have a handle on what the bill at the new house is like.

lurker

831 posts

Ultimate Geek

Lifetime subscriber

#1509824 9-Mar-2016 12:47

I was signing over to Contact for 2 year price freeze plus $200 credit, and 20% prompt payment discount.

Rates were higher but overall I was saving money, not much admittedly (maybe up to $10 a month), and the $200 credit was extra icing on the cake.

Then when my existing provider (Meridian) got the details through they gave me a better deal by increasing my prompt payment discount from 10% to 15%, giving $100 credit and $100 Prezzy card so I decided to stay.

Kind of feel bad for Contact but thanks to them I'm saving a decent amount with my existing provider.

This was in Christchurch from a door sale. I normally send them on their way before they get started but glad I didn't this time.

Aredwood

3885 posts

Uber Geek

#1511659 11-Mar-2016 23:01

Most retailers are just using the lines company increases as an excuse to price gouge. If you are in Auckland - Vector have increased their daily charge from 98c/day to 99c/day. And the per kW/hr charge from 5.52c per kW/hr to 5.55c per kW/hr. (standard user, inclusive) other rates similar. So only a small increase.

Also for the first time, Vector have bought out special price plans for people who have both Natural gas and power. You get the cheaper inclusive rates for power even if you don't have any ripple control or other controlled loads. This means that if you have electricity and natural gas with the same company. That company will be getting a decrease in the lines charges that they pay Vector. Definitely double dipping if they increase their prices.

https://vector.co.nz/documents/101943/1080530/Annual+Price+Review.pdf/b0b746c6-afe9-41de-b27f-e76d75eef96b