Pre-Contracting Pays Off to the Tune of $6 Million

18 February 2013

Business DealSigning up with TUMG well ahead of their contract renewal date paid off for a group of 57 energy clients at the end of 2012.  Unusually aggressive pricing from Meridian and then Contact in December created a savings opportunity that TUMG was quick to exploit.  Energy savings of more than $6million resulted for participating customers – an average of 16.8% per customer.

“Towards the end of November we started to see extremely aggressive pricing from Meridian throughout NZ for time of use (TOU) half hour metered large commercial customers,” explained Chris Hargreaves, Electricity Analyst at TUMG.

“This was unusual as Meridian has not been competitive for quite some time.  The new pricing was on par with what was being quoted over four years ago so it represented a major shift.  We tracked winning Fixed Price Variable Pricing (FPVV) for Upper North Island customers and saw a massive drop of around 20% from March 2012 to December 2012.”

A number of customers had signed up early – between three and six months prior to their expiry date – so TUMG was able to act on this information immediately.

“We issued their RFP’s to market to take advantage of this pricing shift straight away. We were concerned that this level of pricing might not continue because NIWA was predicting a dry summer with higher than average temperatures – which puts pressure on hydro dam levels.”

According to Chris, customers who sign up for a TUMG pricing review well in advance of contract expiry dates put themselves in the best position to secure the most competitive pricing.  TUMG analysts constantly review market prices and other price-influencing factors and routinely set up contracts to take advantage of price and seasonal fluctuations.

If you’d like TUMG to review your electricity and gas contract pricing, contact Richard Gardiner on 09 576 2107.