Powershop

History

Meridian traditionally had been a major electricity generator, but only a small retailer. In 2006, Ari Sargent, an electricity industry veteran, had an idea to increase Meridian's market share in the retail market: turn electricity from a utility into a consumer good. Initially, it was planned to sell electricity tokens in supermarkets, but that idea was scrapped due to cost and they turned the idea to the Internet.

Sargent, with Simon Coley, a design specialist, founded Powershop in September 2007. In September 2008, Powershop bought its predecessor, Meridian Energy's Marketplace Innovations Business Unit, for NZ$1.26 million in stock. After 14 months of private beta, it officially launched to the public on 22 February 2009 and was unofficially available in the weeks prior.

Using Powershop

Once a user signs up to Powershop, there is no need for them to visit the Powershop website any more. Powershop will buy the cheapest "Everyday" electricity for them automatically. However, users that do visit the Powershop website can take advantage of the "Specials" and "Powerpacks" that are on offer from time to time.

Powershop will read the electricity meter once a month, but users are encouraged to read the meter themselves more often to understand their power usage more. Graphs and charts of power usage are provided to the customer. (2014-03-04 'Smart' meters seem to be read daily, and provide usage figures each half-hour.)

All power buying must be performed via their website and payment made by credit card, direct debit or online banking. Phone, Skype, and Twitter support are available. Customers can also credit their account at PostShops. As a launch promotion, a signup pack was sold at The Warehouse.

Powershop provides an API for third party developers to write programs that work with it.

Products

There are three main types of products:

Prices for power were given as cents per kilowatt-hour at a daily rate, and are customised to the customer based on their location, metering configuration, usage and time of year. There are no separate tariffs for separate meters, with the single price per unit adjusting based on the types of meters at the property (anytime, controlled, day/night, etc.), and the usage on each meter (e.g. a cheaper price will be offered if more electricity is consumed on controlled or night). There are no separate fixed daily charges, with the daily charges charged by Transpower and local lines companies to connect the property to the national grid incorporated into the single price per unit, meaning low-use customers will pay more per unit to cover these charges.

In contrast with fixed year-round price or split winter/summer prices charged by regular New Zealand power retailers, electricity prices on Powershop vary month-to-month with seasonal variations in the wholesale electricity price, meaning customers generally pay less per unit during spring and summer and more during autumn and winter. This does have the unfortunate consequence that customers will have to pay more per unit if there is an electricity shortage, such as years with low hydro lake levels or a failure in a major piece of electricity infrastructure, whereas a company charging fixed prices can mostly absorb the costs of these shocks from the extra money earned over summer.

Several brands of power are available on Powershop.

Rugby teams

Meridian

Powershop's parent company, Meridian, is a majority state owned enterprise also publicly listed on the NZX and the ASX. Meridian Energy is the largest 100% renewable generator in Australasia.

PowerKiwi

PowerKiwi is a new power company started by a group of New Zealand bloggers. Currently, they buy electricity wholesale from Powershop.

Airshed

Airshed is a specialist carbon management company.

Metering

All customers with a normal non-prepay electricity meter and an internet connection can join Powershop, no special equipment is needed. For maximum effectiveness, customers have to read their power meter often and enter the readings into the website. Powershop will automatically get readings from customers with smart meters. Customers with Arc Innovation brand smart meters can get their readings updated daily. All customers in Christchurch with a smart meter receive a rebate of 5c/unit (a discount of around 20%) for power used in weekends.

Reception

Powershop planned on 4–50,000 customers in its first year. Powershop achieved 5000 customers in October 2009, and 10000 customers in February 2010. CEO Ari Sargent blamed this on inertia and general distrust of power companies. Energy expert Molly Melhuish claims that because "people are so terrified of their power bills", "a majority of people" wouldn't want to try a new concept like Powershop. The Consumers' Institute of New Zealand welcomes initiatives to increase retail power competition.

In a 2009 survey by the Ministry of Economic Development, Powershop was found to be the cheapest electricity retailer for the typical consumer (one who consumes 8000kWh/year) in Auckland, Wellington, Christchurch, Dunedin, Manawatu and New Plymouth. It was the second cheapest in Wanganui and Wairarapa.

In Consumers' Institute of New Zealand's 2009 survey of electricity companies, Powershop gained the highest rating ever in the history of the survey. 92% of Powershop customers found it 'good' or 'very good'. It did not receive a single poor rating from any of its customers. In 2010, it again received a 92% satisfaction rating. In 2011 and again in 2012, it gained a 96% customer satisfaction rating.

In Australia, Powershop is ranked 1st of 15 companies for customer service tracked by social media tracking website, servicerage.com.