From October, electricity retailers will have to switch customers within 10 working days of being asked, with half of all switches to occur within five working days.
The current rule allows up to 23 working days, but last year's ministerial review into electricity market performance found that was too long.
Energy Minister Gerry Brownlee recently suggested the change might not be the last: the new Electricity Authority will see if the switching period could be further reduced next year.
Market heavyweights Genesis Energy, Contact Energy, Meridian and TrustPower said, when contacted, they supported the limit and assured consumers they would have the resources to achieve it.
But TrustPower spokesman Graeme Purches warned any further cuts - to perhaps as few as three days - could undermine a consumer law protection that gave people time to back out of a deal.
People signed up by door-to-door salesmen were supposed to get a 10-day cooling-off period. Mr Brownlee would have to consider this when assessing new limits next year.
Shorter limits would give companies less time to ask customers whether they really wanted to switch to another provider. This could lead to more switch-over mistakes, Mr Purches said.
Pulse Energy sales and marketing manager Ashley Church, who advocates no stand-down period at all, said small companies such as his would benefit most. Fewer days meant fewer opportunities for rivals to influence or reward customers for staying where they were.
PowerShop chief executive Ari Sargent said there was no doubt that some bigger companies were using as many of the 23 days as they could to claw back customers. Analysts suggested it took, on average, 12 days to switch over recent months, so there was no need to retain such a long limit, he said.
Meridian Energy spokesman Alan Seay said there was nothing wrong with businesses offering customers new deals to keep them from switching. It was just the market in operation.
That said, Meridian supported the limit and had worked hard over previous months to reduce the amount of time it took to switch customers, Mr Seay said.
Domestic Electricity Users Group spokeswoman Molly Melhuish warned companies would have to invest further in technology and staff to meet the targets. No matter how many times a customer switched, that cost would be reflected in their tariffs.
She acknowledged switching times had improved since a series of ministerial warnings last year and early this year, but did not think the accent on speedy change was the panacea to electricity price rises.
Mr Brownlee said many companies were already meeting the new limit. More than 167,500 customers switched companies in the six months to June compared with 275,042 for all of last year.
The market performance review of 2009 suggested households could save, on average, about $100 a year by switching to the cheapest retailer.
Labour Party energy spokeswoman Nanaia Mahuta said the move showed switching electricity companies was not easy, and that switches could take up to six weeks.
Changing the rules would benefit consumers in the short term but there needed to be a long-term plan to curb household power price rises.
Switch rates
| Year | Total switches | Monthly average |
| 2007 | 184177 | 15348 |
| 2008 | 210873 | 17573 |
| 2009 | 275042 | 22920 |
| 2010* | 167570 | 27926 |
- *Six months to June
Source: Electricity Commission
