• GreyPowerElectricity PUL1079 PPD Banner 1920x607px

What’s the deal with prompt payment discounts?

Love ‘em or hate ‘em, prompt payment discounts (PPDs) are everywhere in the New Zealand electricity industry.

Well, just about everywhere.

Here at Grey Power Electricity, we don’t offer a PPD for one very simple reason: we build the discount directly into our upfront prices. This ensures that all our customers - including those on tight budgets who may not always be able to make PPD deadlines - are getting the very best bang for their buck.

Want to learn more about PPDs?

Read on to get a better understanding of how they work and learn more about why Grey Power Electricity doesn’t offer one.

What is a prompt payment discount?

A PPD is a conditional discount offered by some retailers. The details of a PPD can vary depending on the industry, but generally it means that the supplier will provide a discount if the consumer meets certain conditions as specified in their contract.

PPDs are widespread in the New Zealand electricity sector. An energy company that provides a PPD might agree to knock a certain amount (say, 10 or 25 percent) off your bill so long as you, the customer, hold up your end of the bargain (i.e. pay your power bill within a given time frame).

This might sound like a pretty sweet deal - after all, who doesn’t love a good bargain? But there are some issues with this type of pricing model.

The major downside of a PPD is that you’ll be charged at the non-discounted rate if you fail to pay your bill within the specified time frame. Of course, nobody intends to miss their PPD window, but it does happen - and when it does, it can put unnecessary financial stress on Kiwi families.

This has prompted some critics to say that PPDs are more about penalising late payers than rewarding prompt payers - and many New Zealanders agree. More than 1 in 5 (21 percent) Kiwis believe that a PPD is a penalty for paying late, according to the results of The Great New Zealand Energy Survey 2017.

Why does Grey Power Electricity not offer a prompt payment discount?

Unlike many other power companies, Grey Power Electricity does not offer a prompt payment discount. Instead, we integrate the discount into our pricing to provide a low price upfront for all our customers. We also provide transparent billing by itemising our charges, so you can see exactly what you’re paying for.

If you’re not able to pay your power bill by its due date, you’ll be charged a flat fee of $1 per day + GST. As you might imagine, this usually works out to be significantly cheaper than instantly adding an extra 10-25 percent to your power bill if you happen to miss the PPD window.

Weighing up your options

An electricity provider that offers a PPD isn’t automatically going to be better value than a retailer who doesn’t. By integrating a discount into our pricing model, Grey Power Electricity is able to offer very competitive rates without giving you excessive penalties for late payments.

It’s important to be mindful of the pros and cons of a PPD. Do your research, weigh up the benefits and take a holistic view of your energy needs before making an informed decision about your choice of power company.

For more information about our prices or to make the switch to Grey Power Electricity, feel free to give us a call on 0800 473 976 or fill out our online enquiry form and a member of the team will be in touch with you shortly.

If you like the article please share it with others!  

Post your comment


No one has commented on this page yet.

RSS feed for comments on this page | RSS feed for all comments


Suggested Posts

New Year, new you - new power company?

PUL1279 GPE ImageTile NY 354x276px HR

We’re about a month into 2020 and if you’re anything like us you’ve probably already fallen off the bandwagon once or thrice in regards to your New Year’s resolution. Read more

How much do Christmas lights cost to run?

PUL1278 ImageTiles Christmas 354x276px GPE

‘Tis the season to be jolly - and what better way to express your holiday jolliness than by wrapping your home in hundreds of twinkling Christmas lights? Read more

5 things we love about summer (power edition)

GPE mobile

There’s a lot to love about summer in New Zealand. Whether you’re catching a tan, road tripping or chowing down on fish and chips at the beach, summer is the... Read more

Request a Call

If you would like one of our team to give you a call, fill in this form below.