Meridian Energy ditches early discounts for customers who pay on time

Something is about to disappear from the power bills of hundreds of thousands of Kiwis.

Meridian is ditching its prompt payment discounts and giving everyone the discount rate.

That means 18,000 of its customers will no longer be penalised for paying their bills late.

"A lot of those people are people that can probably least afford it," Meridian chief executive Neal Barclay says.

Those who have been missing out on the discount can expect to save $20 or $30 on every bill.

"That $30 is going to be really helpful to buy groceries, helpful to pay rent, children's costs... people live on the margins, especially those that are on benefits," Mr Curson says.

And it's the power company  not its customers taking the hit. It will cost Meridian $5 million a year.

"It's not fair and it's an outdated policy across the whole industry and we're taking steps to change," Mr Barclay says.

The change follows the release of a Government report singling out the discounts as a driver of "power poverty".

"I think it's given the industry a kick in the pants. And it's motivated us to move on this a bit quicker than what we would have otherwise had done."

Consumer NZ says Meridian's move will give the rest of the market a wake-up call.

"Meridian will get the first mover advantage, but I'd be very surprise if the others didn't quickly follow," Consumer NZ chief executive Sue Chetwin.

The new policy will come into force on October 1.