Electric Kiwi: A History of Innovation and Market Challenges
Founded in mid-2014, Electric Kiwi entered the New Zealand electricity retailing market with a vision to modernize how energy is managed and sold. After conducting tests with initial customers in December 2014, the company officially launched to the public in May 2015. The founders—Julian Kardos, Phillip Andreson, and Huia Burt—identified a significant opportunity to leverage smart meters (electronic devices that record electricity consumption in real-time), which they and Consumer NZ believed were under-utilized at the time.
By using data from these smart meters, Electric Kiwi aimed to determine its wholesale electricity purchases more accurately, intending to pass the resulting savings directly to its customers.
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Key Facts
- Founded: Mid-2014; public launch in May 2015.
- Core Strategy: Utilizing smart meter data to optimize wholesale energy purchasing.
- Service Expansion: Now offers electricity, broadband, and mobile phone services (MVNO).
- Market Stance: Frequent advocate for market reform and critic of the "big four" generator-retailers.
- Mobile Network: Operates as a Mobile Virtual Network Operator using the 2degrees network.
Operational Milestones and Market Friction
Smart Meter Advocacy and Competition
Electric Kiwi has consistently pushed for the adoption of smart meter technology. In April 2017, the company accused competitor Trustpower of intentionally slowing smart meter roll-outs to prevent customers from switching to retailers that rely on that technology. While the Electricity Authority expressed satisfaction with general roll-out rates, the incident highlighted the competitive tension surrounding data-driven retailing.
The "Free Hour of Power" and Infrastructure Strain
One of the company's most notable promotions, the "free hour of power," led to unexpected infrastructure challenges. In July 2018, reports indicated that local power lines in northern Dunedin were overloading, causing regular outages. This was primarily due to a high concentration of students from the University of Otago and Otago Polytechnic selecting the same free hour, creating massive demand spikes.
Electric Kiwi attributed these outages to poor housing quality and inadequate local lines infrastructure. Conversely, Aurora Energy, the local lines company, argued that increasing capacity for such short-term spikes was uneconomical. This prompted the Energy Efficiency Conservation Authority to launch the 'Gen Less' campaign in September 2019 to encourage reduced energy use among students.
Regulatory Disputes and Market Volatility
Wholesale Price Spikes
The volatility of the wholesale electricity market has frequently impacted Electric Kiwi's operations. In October 2018, during a price spike, CEO Luke Blincoe temporarily halted customer switches from spot-price providers, comparing spot-based retailing to being uninsured due to the risks of market volatility. Electric Kiwi, along with other providers, filed a complaint alleging an "Undesirable Trading Situation," though the Electricity Authority later concluded the spike was caused by gas supply information gaps and outages rather than anticompetitive behavior.
Industry Complaints and "Greenwashing"
Electric Kiwi has frequently challenged larger competitors through regulatory channels:
- Greenwashing Claims: In June 2019, the company complained to the Commerce Commission and Advertising Standards Authority that Meridian Energy's claims of 100% renewable electricity were misleading, as most energy enters a shared grid. These complaints were eventually dropped.
- Hydropower Management: In November 2019, the company complained about water spilling from hydropower stations operated by Meridian Energy and Contact Energy following heavy rainfall in Southland.
- "Win Back" Practices: In April 2020, Electric Kiwi alleged that Genesis Energy breached government bans on "win backs" (offering improved deals to customers who are attempting to leave).
Recent Developments and Diversification
The 2024 Market Crisis
In July 2024, Electric Kiwi took the drastic step of stopping the acceptance of new electricity customers. This decision followed a nearly 73% increase in wholesale energy prices over six months, which the company claimed made new unhedged customers loss-making. During this period, the company criticized regulatory authorities for failing to act against record profits among the four large generator-retailers: Mercury, Contact, Meridian, and Genesis.
Expansion into Mobile and Broadband
Despite electricity market challenges, Electric Kiwi expanded its portfolio. In August 2024, it became a Mobile Virtual Network Operator (MVNO) using the 2degrees network, offering flexible data plans. By October 4, 2024, the company resumed accepting new electricity customers as wholesale conditions improved, allowing consumers to bundle electricity, broadband, and mobile services from a single provider.
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| Category | Details |
|---|---|
| Founders | Julian Kardos, Phillip Andreson, Huia Burt |
| Launch Date | May 2015 (Public) |
| Key Services | Electricity, Broadband, Mobile (MVNO) |
| Mobile Partner | 2degrees |
| Primary Tech Focus | Smart Meter Integration |
Frequently Asked Questions
Why did Electric Kiwi stop taking new customers in 2024?
The company stopped accepting new electricity customers in July 2024 because wholesale energy prices had risen by nearly 73% in six months, making new unhedged customers financially unsustainable.
What is a Mobile Virtual Network Operator (MVNO)?
An MVNO is a wireless communications services provider that does not own the wireless network infrastructure over which it provides services. Electric Kiwi operates as an MVNO by using the 2degrees network.
What caused the power outages in Dunedin related to Electric Kiwi?
Outages occurred when a large number of customers (mostly students) used their "free hour of power" at the same time, overloading local lines infrastructure that was unable to handle the sudden spike in demand.
What is "greenwashing" in the context of Electric Kiwi's complaints?
Electric Kiwi used the term to describe advertising claims of 100% renewable electricity, arguing that because energy is fed into a shared grid, such specific claims are misleading.
Can new customers now join Electric Kiwi?
Yes, as of October 4, 2024, Electric Kiwi announced it is once again accepting new electricity customers following an improvement in wholesale market conditions.