Globug: Phone app a new source of power

Technology is changing most things in our daily lives at a searing pace and the retail power industry is no exception – as a new phone app is proving.

Globug’s app solves the old problem of assessing power usage and billing for it. Some parts of the industry still have the old system of a meter with a spinning disc which is regularly read by an inspector – but that is fast dying out.

Smart meters, which electronically measure usage, mean consumers are charged on actual consumption rather than an estimate based on past usage. The data flow provided by smart meters enabled Globug to develop its app – allowing users to monitor power usage at home and to top up their pre-pay system so they always know what they are spending.

If they see their power is getting low, they can pre-pay by debit card, credit card or internet banking – all through their smart phone app.

That, according to Luke Blincoe, general manager of Globug, fits in not only with the company’s technology drive but its accent on lower-income households – often caught out by the post-pay system if they cannot pay by the due date, triggering extra costs and sometimes starting a cycle of energy debt.

Blincoe says Globug’s pre-pay scheme is already the fastest-growing electricity retailer in New Zealand so far this year, topping the charts compiled by the New Zealand Electricity Authority for March, May and June and across the entire calendar year so far. The company now has 29,000 customers across New Zealand (up from 18,500 last year) – and is already moving on from its first customer interface, an in-home display unit indicating account balance and using coloured lights to signal when pre-paid power is running out.

The unit showed green when power is connected and the account is in surplus, orange when it is running low and red when it is about to run out. Now the app takes care of all that. Consumers can also sign up for a text or an email when their power is running low and the same information is also available on a website.

“We are seeing steep growth in people using the app on their smart phones,” says Blincoe. “It’s grown from about 3000 customers in January to about 11,000 now.

“Our customers are telling us they really value having that information at their fingertips when they want it, how they want it. It’s the modern way to work with them.”

Globug is also leading the way internationally. Even markets like Ireland – where about 40 per cent of all power is consumed on a pre-pay basis – doesn’t have an app developed like Globug’s.

“Most people think that a smart phone app would not apply to lower income groups but the plain fact is that the vast majority of our customers have smart phones. We’ve just done some research which shows this is increasingly how customers want to get their information and control their energy service – even if just to look at usage and trends over a daily, weekly or monthly period.

“So we are pretty sure that, in a fairly short time, practically all our customers will be running their power accounts over their phone – monitoring, assessing and paying for their power.”

Globug says many consumers can make savings by switching to their pre-paid system, up to as much as $300-$400 a year. That’s because Globug offers discounted prices to customers with community service cards, who pay 6.6 per cent less on average than other New Zealand consumers – but whose total savings are likely to be far greater. That’s because many power consumers pay their bills late, sparking those unwelcome extra charges.

Original post on NZ Herald



Globug – the consumers no one else wanted

Imagine a power company without disconnections – that was a big part of the reason Globug was born.

That simple idea is on the way to reality; Globug’s parent company Mercury has slashed disconnections by over 90 per cent since 2006 by providing Globug’s pre-pay alternative as well as changing its credit processes.

It is an important part of the company’s operations, as disconnections lead to a disconnect in more ways than one. There are few business textbooks which advocate cutting off customers – even if that is commonly done for non-payment of bills.

So Globug set out to find a way to minimise disconnections and, in doing so, discovered a way to engage with a slice of the market that no one else was attempting to reach – low-income households.

The usual power billing system invoices householders after they have consumed the power. Typically, discounts are given for prompt payment but, if payment is late, extra charges can arise. In households where some juggling is required every month to pay the bills, those added charges could tip a family into debt.

Globug dug into the possibility of pre-paid power instead of post-paid on the basis, says Blincoe, that “allowing people to get into debt is not healthy and not socially responsible.”
“We also wanted to slash disconnections as part of that social responsibility.

We decided we would look at re-positioning pre-paid power by taking things from a potentially punitive scenario to one that built on the old coin-in-the-slot method of paying for power as you go.”

Smart meters were the way and the company threw its engineers into designing a meter that would give householders more control over power usage and with quick, easy and cheap functionality that would enhance the “customer experience”.

Globug technology is now on its third version and has evolved to a smartphone app which shows consumers how much power they have used, down to a day-to-day level, and allows them to make a $20 minimum payment through the app or online or at 6000 retail outlets worldwide.

“The truth is that disconnections – which can cost up to $150, depending on the company involved – always cost power companies more than is recovered. It generally involves contractors visiting the site, and it is just not cost-effective, sending out a man with a screwdriver to unscrew wires – especially if the householder isn’t home and they have to come back two or three times.”

The smart meter, the control and the massive cut in disconnections fuelled another side of Globug’s growth. It literally empowers a section of society, those who have fallen foul of credit checks or a bad credit history.

Credit checks are a necessary but difficult part of running a consumer-facing business and a poor history can have long-lasting effects. But there is no need for credit checks with a pay-as-you-go system; the business expense of such checks, debt recovery, and chasing defaulting customers is also gone.

That means Globug is able to engage effectively with low-income households, a large customer group many businesses either ignore or find expensive to maintain.

In a community sense, being a company which caters to people with specific needs is beneficial. In a corporate sense, mitigating risk factors inherent in doing business is more important than ever in these days of shareholder value and new generations of consumers who grow up expecting social responsibility from businesses.

“We worked with a lot of other agencies to make sure we were getting this right,” says Blincoe. “We worked with resource agencies, budgeting consultants and other stakeholders who were able to give us insight into the economic needs of these customers and how we could improve the product to meet those needs.

“We have found people have better control and they enjoy that control; it makes them feel empowered. From the feedback, people are not feeling so stink about getting a bill – they know how much they are using and can easily juggle things round to pay their bills.”

Original post on NZ Herand



Who pays the most for power?

Dunedin has the cheapest power prices in New Zealand while Kerikeri has the most expensive in the North Island – but good savings are available nationwide, according to power retailer Globug.

In the quarterly survey of domestic electricity prices to May 15, compiled by the Ministry of Business Innovation & Employment, Dunedin has the cheapest retail electricity rates (at 24.2c per Kilowatt hour) while Balclutha has the most expensive (38.9c/Kwh). Kerikeri, at 36.1c/Kwh, has the most expensive retail prices in the North Island.

The report covers 42 distinct power regions where prices may vary according to costs like transmission, generation, distribution and other factors. However, Globug – the fastest-growing electricity retailer in the country so far this year – says many consumers can make savings by switching to their pre-paid system.

Luke Blincoe, general manager of Globug, says the dollar saving around the country can be as much as $300-$400.

“We know this is a pattern around the country, particularly in households that struggle to make ends meet at the end of the month and end up juggling which bills to pay,” says Blincoe.

“If they hold off on paying the power bill, their cost goes up by 10 per cent and often by as much as 22 per cent. This can lead to a cycle where household debt goes up and, if they are unfortunate enough to be disconnected, that is another big cost to them.”
Globug’s pre-paid system avoids all that and a handy phone app means as little as $20 can be easily paid without leaving home. Users can also top up their power online or in thousands of dairies around the country.

Phones are the favoured method, says Blincoe: “Our research shows 75 per cent of low-income households have smart phones these days so it is easy for most people.”
However, research also shows many households can save on power costs.

The Bay of Islands, King Country, central and southern Hawkes Bay and Otago are the areas of New Zealand where the highest savings can be made. Significant savings can also be made in the major centres.

“Some customers, who are not on average rates but on more expensive plans, will save more as companies have varying positions in different networks. In some networks and with some suppliers, savings can be very significant.

“For example, an average family, with a Community Services Card, using 8000 kw/h per year on Meridian in Auckland could save $203 on power a year with Globug before any additional savings for lost prompt payment discounts are taken into account (data from Consumer Powerswitch site).

Those extra savings could add about $140 a year if they missed half of their discounts.”

New Zealand’s power rankings

(cheapest to most expensive, all figures are c/kWh and were sourced from the MBIE Quarterly Survey of Domestic Electricity Prices)

1. Dunedin 24.2
2. Cambridge 25.4
3. Oamaru 25.6
4. Kaiapoi 25.7
5. Invercargill 25.8
6. Timaru 25.9
7. Paraparaumu 26.1
8. Christchurch, Ashburton 26.5
9. Richmond 26.8
10. Wellington City 27.0
11. Auckland Central 27.3
12. North Shore 27.6
13. Queenstown 27.7
14. Rangiora 27.8
15. Palmerston North 27.9
16. New Plymouth 28.0
17. Whangarei 28.3
18. Pukekohe, Hamilton
19. Whanganui 28.5
20. Napier 28.6
21. Whakatane 28.7
22. Dannevirke 29.0
23. Winton 29.6
24. Nelson 29.7
25. Thames 29.8
26. Taumaranui 30.5
27. Taupo 30.8
28. Rotorua 31.1
29. Otorohanga 31.2
30. Cromwell 31.4
31. Hawera 31.7
32. Masterton 31.8
33. Waipukurau 32.0
34. Tauranga, Gisborne 32.3
35. Blenheim 32.9
36. Greymouth 33.1
37. Kerikeri 36.1
38. Westport 36.4
39. Balclutha 38.9

Potential savings

Major Centres (Source: data from MBIE Quarterly Survey of Domestic Electricity Prices, assuming annual savings for a family using 8000kWh a year with a prompt payment discount of 10 per cent for each bill, which they miss 50 per cent of the time)

Auckland Vector North $ 262.04
Dunedin $ 236.76
Auckland – Vector Central $ 235.61
Central Canterbury $ 203.43
Wellington $ 182.13

Article originally from NZ Herald



Powerful way to avoid debt

The fastest-growing energy retailer in the country says its stellar growth is down to a simple fact – it saves people money.

Globug – the pre-pay scheme which allows people to manage their use of power and how they pay for it – is the fastest-growing retailer in New Zealand so far this year, topping the charts compiled by the New Zealand Electricity Authority for March, May and June and across the entire calendar year so far.

The company now has 27,000 customers across New Zealand (up from 18,500 last year) just a few years after rolling out its signature in-home display (which doubles as a clock) showing when pre-paid power is running out.

That display has now evolved to a smartphone app and Globug has spread beyond Auckland to Christchurch and most other parts of the country.

Globug says users with community service cards (see below for eligibility) are paying over 6 per cent less on average than other New Zealand consumers.

General manager of Globug, Luke Blincoe, says the dollar saving can be as much as $300-$400 a year if low-income households escape a cycle of late or unpaid power bills which create extra costs.

“That’s what we think is the great part of what we offer,” he says. “It is helping people avoid debt and the associated embarrassment and stress by giving them more control of their energy usage and payment.”

Convenience is one thing (customers can top up their power supply without leaving home by using their computer or a smart phone app) but the way Globug has made vulnerable, low-income households masters of their own energy destiny helps empower them.

In business terms, it has helped solve one of the biggest challenges of most consumer-facing businesses in New Zealand – how to make discounts and other benefits available to a large customer group few woo: low-income households.

It’s a reality of life – people on low incomes often end up paying more. That’s true whether it’s credit card interest, being unable to get a discount for cash when buying a new TV, for example, or having to pay more interest on loans taken out over longer periods to allow practicable repayment levels.

Electricity retailers have an extra element to contend with – power, even though it must be paid for, has a community dimension as it is essential in New Zealand homes, as in all developed economies.

The post-pay system, where households pay monthly for power consumed, works well if people keep up with payments and take advantage of prompt payment and other discounts (PPDs). If paying monthly doesn’t work, the knock-on effects can become difficult for them.

“We know what it is like,” says Blincoe. “When winter comes, we all use power more at home – and we get bigger bills. The price of power hasn’t gone up but our usage has. If a customer can’t pay their bill in full, on time, they end up paying more – and low-income homes who have to juggle their bills from week to week are often the worst affected.
“Then, if they get disconnected, they are charged a fee to re-connect – creating more debt. Globug just blows this cycle away, for good.”

It allows account holders to pay for their energy in increments they can afford and there is no charge for re-connection. Users get at least 24 hours to top up with $20 minimum payment after their balance gets low.

Blincoe says Globug’s experience has shown people understand the new system and are managing household energy costs better as well as saving money.

“We’ve had a lot of good feedback from customers who love the fact they no longer get large power bills in the mail. It is one less bill to contend with every month, saves money and keeps the lights on.”

# Community service cards can help low-middle income earners with reduced costs in prescription, some doctor and hospital fees, emergency dental care and home help. It is available through Work and Income NZ, but many may not realise they are eligible – single people living with others qualify if they earn $26,000 or less; a couple with no children if they earn up to $41,000.

Families are assessed on a sliding scale – a family of four can qualify if the household income is $67,000 or less.


Original article on the NZ Herald


Figures show budgeting is needed as much as ever

The Federation of Family Budgeting Services says the number of New Zealanders needing help with their household budgeting continues to place pressure on community organisations.

The Federation is the professional body for budgeting services, with 162 member organisations across New Zealand. CEO Raewyn Fox says they have just completed a statistical gathering round and the results make for interesting reading. “We’ve been seeing over 45,000 client families each year for the past few years. This places significant pressure on our services yet we’re continuing to see incredible results from budget advisers with stretched capacity,” Fox said.

Budget advisers are a mix of volunteers (56%) and paid staff (44%), whose clients tend to present in debt strife. “Some of our clients are income earners, and some are beneficiaries. Not all of them are in debt, but many are,” Fox explained. “The average debt is $25,500 per client, or $464.5 million in total. Of that $25,500, about $3,700 would be overdue. That’s usually the crisis that brings them to us.”

Fox said even paid advisers often volunteer extra hours to help clients get through. Almost 460,000 hours were spent offering budgeting advice in the past year. “It’s an amazing effort from very dedicated people.”

This effort shows very real results for New Zealand communities. Around $50 million of debt was repaid (or otherwise settled) with businesses, about $2,700 per client, before the client was confident enough to continue on their own.

The Federation advisers allocate client debt in to any of 11 categories. Clients owed the most to mortgages ($176 million), finance company loans ($87 million), bank loans ($68 million) and government departments ($63 million).

The Federation has been proactive in attempting to reach clients earlier, delivering nearly 1,800 community education courses each year. “Community education courses are a great way to let people know a little about budgeting, but also shows them what a budgeting service does. This means that if things start to go a bit pear-shaped for that person, they know where to turn – early. Problems are always easier to sort out early on.”

The New Zealand Federation of Family Budgeting Service offers free, confidential and non-judgemental advice through its network of 162 member budgeting services. You can find you nearest budgeting service at or by calling 0508 BUDGETLINE.


Budgeting in practice

Quite a long time ago, one of our old advisers, who was getting near 80 at the time, decided to pack it in and spend his days in his garden instead.  It wasn’t because he was feeling too old or past it, he said, that was far from the reason. The reason he was leaving, he insisted, was that we had largely ceased to be a budgeting service, but had increasingly become a debt management service. When he had started budgeting, way way back then, the majority of his clients received enough income to be able to meet their day to day living costs, once they had acquired the necessary budgeting skills. Now it was all different, and he didn’t like it, and his heart wasn’t in it anymore

How a mole hill becomes a mountain

I’m not going to debate the merits of his reasoning, but one of the big problems for so many clients today certainly is debt, and very often the debt is compounded monstrously not only by interest and penalty charges, but by people, desperate people, taking out loans that they also can’t afford to repay, to pay those unpaid bills. They don’t seem to be able to grasp the fact that if they don’t even have enough to pay their bills, how can they ever repay a cash loan, mostly at savage and extortionate interest rates? They’ll cut back on food, that’s what they’ll do, and rely on food banks, miss the rent and the power bills. The cash loan companies and the debt collectors feed off each other. Too many clients just make it worse and worse for themselves, as penalties and interest charges slowly transform a mole hill into a mountain.

Our magic wand is broken

So many people, so much debt, so many debt collection agencies.  It’s enough to make you sob into your Weetbix. There are so many people come in, and they say they just want to clear their debts. That’s understandable. Trouble is, half of them don’t even know how much debt they have, they have moved around too much, kept running to stay ahead of it all.  Now they’re tired of running, they want us to find out their debts for them first, and then they want us to wave a magic wand and make it all go away. That it might take effort and commitment from them is a hard message to hear.

Shopping bags and tax refunds

I had one woman who came in, and when I asked her about her debt , she said she didn’t really know, but she did have a lot of letters at home, all of them unopened of course.  Human nature, hide from the horrid stuff, or try to run away.  I made her bring them all in, in shopping bags, tipped them on to the desk, and started opening them while she shrank back in fear on the other side as though a snake or poisonous spider might crawl out and strike at her. It was the IRD letter that frightened her most, because she had no idea of what demand or threat it contained, but it turned out though that it was a tax refund cheque for her, which could have stayed in the drawer for ever.  It all quite made her day, her situation wasn’t nearly as bad as she feared, almost manageable in fact, and she also found some extra spending money.

Calm minds make good choices

People panic when they’re stressed out, they do really crazy stuff, and we have to try to stop them doing it.  That fence at the top of the cliff we talk about so much. People have to take responsibility for their lives but you can’t make anyone see sense or logic when they’re in the middle of a panic attack. You’re got to get them calm first, concentrate their minds, and help them work it out themselves, and then we’re half way home.

Lessons learnt

  • Always open mail, and check due dates, and interest charges.
  • Don’t just plan for the future, keep track of the past and present, particularly debts.
  • If you can’t afford to pay your old debts, you probably can’t afford to repay new loans either.
  • Debt consolidation loans sound too good to be true and often are. Check with your adviser.



What sort of assistance can a budgeting service offer?

I wanted to share a story with you about a client that I recently worked with. The client, who I will call John, had recently shifted to Dunedin. He had come from the central North Island to take up a position as a manager with the company he was employed by. John had approached our budgeting service because, despite earning a good salary, he was unable to pay his power bills on time. I was able to access a fund local fund provided by our City Council to help with his immediate need and pay his overdue power bill, however this was not going to provide a long term solution for John.


How high is too high?

John lived with his wife and teenage daughter. Being new to Dunedin, John didn’t know what sort of power bills to expect but was shocked when he received $500 – $600 power accounts each month. He was used to paying in the region of $150 and explained that he and his family were doing everything in their power (excuse the pun) to keep their power usage down. He explained he was showering as little as possible, turning everything off at the wall when possible and they were using blankets instead of the heat pump. After investigating John’s power account it struck me as being very high for a small family of three.


Technology to the rescue

Knowing that John’s electricity supplier was currently installing smart meters in Dunedin, I asked him if he by chance had one. He did, so I showed him how to install an app on his smart phone that can show your electricity usage from monthly right down to hourly. What I noticed was that even at night time John and his family were still using a lot of power. This was very strange because everything was switched off. Having come across this issue before, I advised him that there may be faulty wiring, a problem with the hot water cylinder, or maybe a fault with the heat pump?


Tenants have rights too!

John asked me what he could do about this. I explained to him that tenants have rights. Landlords among other things must ensure that the plumbing, electrical wiring and the structure of the building is safe and working. As we suspected an issue with the plumbing or wiring we could request that the landlord have this looked at. John’s landlord was in Auckland and was paying a property management company to look after the property for him. We contacted the property manager and requested that they have the power consumption issue looked at and fixed. The property manager came back to us and told us that the owner had recently spent money on the property and was not willing to have any further work done. I explained to John that this was not good enough.


Stand up for your rights

I downloaded a 14 Day Notice form from the Department of Building and Housing website . We requested that the property manager address John’s issue or he would be going to the Tenancy Tribunal and would be asking to be released from his lease. The 14 days came and went with no word coming from the property manager. We applied online to the Tenancy Tribunal for a fee of $20.44, giving all of the relevant facts in the application and shortly after John received a date for a Tribunal hearing. I attended the hearing with John where the property manager tried to argue that John had wanted out of his lease the whole time. The adjudicator was quite firm with the property manager and advised that landlords have responsibilities just like tenants do. The adjudicator made a decision in John’s favour and ordered that he be released from his tenancy and be reimbursed the $20.44 that he paid for his application. John was so delighted that the next day he brought his wife in to meet me and at Christmas he dropped in with a card and a box of chocolates.


So what kind of assistance can a budgeting service offer?

Well as you can see budget advisers do more than play around with numbers. We can help in all sorts of ways and if we can’t, we can try and point you in the right direction. Of course you need to play your part too and be willing to engage in the process.