Powershop

The SST report on the innovative new subsidiary of Meridian – Powershop.

MERIDIAN ENERGY, through its subsidiary Powershop, is boasting the world’s first online electricity shop. The carrot is a potential $200-plus savings in your annual power bill, depending on how much power you use, and where you live.

I had a briefing from Powershop a few weeks ago, and it is a neat little thing they have done.

But consumer reluctance to use the net-based PowerSwitch site, which allows consumers to compare different power company prices and plans, and act accordingly, suggests otherwise.

The big drawback with Powerswitch is that consumers could go to the trouble of switching to another supplier to get a marginal price saving, only to find a better deal is posted a week, or month later by another power company.

“But with Powershop you are never tied to a single power company,” says Powershop chief executive Ari Sargent. Customers could buy electricity online sufficient for the next day, or the week or month ahead if they chose, and then switch to another offer online if a cheaper deal came along.

This is the neat thing – you just buy units of power from whichever company you want.

energy analyst Molly Melhuish says the absence of other big retailer names offering deals on Powershop is not necessarily critical to its success.

“The deal with Powershop is not the brand of the suppliers, but the ability of the offerings, from whatever source, to achieve lower prices through the backroom savings that a net-based operation can achieve,” she says.

Melhuish compared the price she was paying Meridian for power in Wellington (22.24c/kwh plus fixed charges for a total unit charge of 24c) with that offered online through Powershop last week 19.79c per unit.

I’m currently with Empower, and am likely to change. It won’t appeal to everyone, but if you are the sort who likes to buy things online, and manage your own usage, then it is good.

Once transferred from a retailer and signed on to Powershop, a customer is presented online with a range of three different products from five competing supply options (two each from Meridian and Kiwi Power and one from Powershop).

The Everyday product is electricity that can be used straight away. There are also special deals that are posted from time to time.

And Powerpacks allow customers to buy electricity at current prices for use at a later date. Winterpacks, for example, would allow customers to buy electricity now (late summer) at current prices for use during June-August.

Basically it is another market innovation – allowing consumers choice in who they buy from, and what sort of pricing structure works for them.