Monday, November 15, 2010

Back to price rises

We have to apologize for not realizing on Friday that when we said that we would "write about this tomorrow" it would be Saturday.

What we posted on Saturday about the Russians was not part of our usual schedule it's just we were in the office reviewing our advertising when that stat was discovered.

There is another reason why electricity prices have risen recently, and are likely to rise again next year.  The reason has to do with the after math of the story of Folole Muliaga.
Now we don't want to discuss this case too much as the events that lead to this are a blog series in themselves.

However suffice to say that Mercury Energy was lambasted in the media, was vastly unpopular and the government of the time made it very clear that if something of this type was to ever happen again there would be consequences.

Before this story the Power Companies (almost universally) had this policy - If the customer said they were reliant upon electricity for a reason all disconnection action would cease for 30 days.  The customer had that time to provide proof of this.  Usually this was in the form of a doctors note.
At the end of the 30 days action would resume.

What happened after the story is that the Power Companies felt that actually obtaining proof was too onerous on the customer.  All that was required was for the customer to claim they were reliant upon electricity.  Once this claim was made the property would never be disconnected.

What happened then was the segment of society who otherwise would have been bad debts claimed they had oxygen machines and all of a sudden their electricity was left on.
Bad debt ballooned.  To the tune of millions.

Suddenly the Power Companies realized they were essentially throwing money away they wanted to make it back.

They did this almost universally by raising prices.
Your prices will stay high.  We recommend purchasing a Power Panda.  We've already expressed our disgust with the Power Companies for their behavior, but feel free to do that also.

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