NZ energy prices fall, websites thanked

If you ever needed proof that the internet puts power into the hands of the consumer, take a look at the latest electricity prices in New Zealand.

Energy prices have now fallen for two consecutive quarters, for the first time in almost 13 years. The main reason being touted for this is growing competition, fuelled by price comparison websites, such as the government's www.whatsmynumber.org.nz, which covers the electricity market.

The website enables people to quickly identify their estimated savings using a simple calculator. People wanting to access the estimated savings can then link to the Consumer NZ's Powerswitch site www.powerswitch.org.nz to confirm a new retail deal and initiate the switch to a new retailer.

Around a quarter of a million Kiwi householders switched providers in 2011. This amounted to a record one in four households, as switchers increased 12 per cent last year, which is up 74 percentage points since records began eight years ago.

Online providers like Powershop benefited most, thanks to campaigns to highlight the benefits of switching providers.

We have seen how price comparison websites like Trivago, Moneysupermarket.com and Gocompare have revolutionised the travel, insurance and finance sectors, especially overseas, but now we can see a clear example of the web bringing power to the people in one of the most basic of commodities in New Zealand.

While the consumers may seem the main beneficiary, we should also remember that online also provides businesses with a cheaper retail channel. It also adds transparency for the government, which is the dominant supplier in New Zealand and can be blamed for price increases.

It all confirms that no matter how markets operate and are regulated, by letting people make better, informed choices, which help bring prices down, the internet truly does bring power to the people. Of course, what it means for retailers struggling to adapt to change is another story.