Smallfry nip at big NZ power retailers heels: ForBarr

Thursday 22nd July 2010 1 Comment

Competition for retail electricity customers is changing, with strongest customer gains coming from new retailers, while Mercury Energy's growth of recent months has halted, says broker Forsyth Barr.

However, the big players still dominate in absolute numerical terms, with Contact Energy's customer acquisition activity in Auckland gaining it the largest number of new customers in June, up a net 1046, according to new figures from the Electricity Commission.

That rise came mainly from 2376 customers gained in Auckland, offset by falls in most other areas, including South Island strongholds where Contact has been under attack and vulnerable to price wholesale spikes caused by weaknesses in the Cook Strait cable.

The second largest retailer, Genesis Energy showed its first customer growth since September 2008 in the month of June, while Mercury's total customer numbers fell for the first time since then.

TrustPower's customer losses also continued, with ForBarr analyst Andrew Harvey-Green predicting the Infratil-controlled generator-retailer would keep losing customers over the next two years, while Contact's medium term customer numbers were likely to remain flat.

"We expect (Contact) will have some good months and some bad months, depending on how successful it is in gaining customers in the North Island," said Harvey-Green in an email to clients.

The strongest proportional gainers were retail-only player Pulse Utilities, Meridian-owned online retailer PowerShop, and Mercury-owned Bosco.

In the last six months, Pulse has increased customers from 1209 to 7304, PowerShop has grown from 6837 to 16,473 and Bosco has gone from 10,767 to 14,851. The Genesis sub-brand Energy Online has lost customers in the first six months of the year, falling to 64,472 customers, compared with 67,048 six months ago.

Businesswire.co.nz

Comments from our readers

On 22 July 2010 at 4:30 pm Peter Cox said:

I'm not in the slightest bit surprised. Most of us have realised there is a war out there,not only in suppliers but in consumers. Anything to be gained.....anything.....is being studied closely by the general populace. Those at the top dont really understand what IS going on.....it's getting tougher....much tougher than we thought! Peter