Power prices have climbed relentlessly over the past decade.

The usual justification is that the country needs more power and that the cost of generating this has increased (power stations are expensive to build and maintain). The population is growing and we’re using more electrical technology than ever before – although greater efficiency in lighting and heating products has helped offset some of this demand.

New Zealand’s total power use has doubled in the last 30 years. Various governments have taken differing views on the relative proportions that industrial, commercial and residential users should pay for the costs of generating and supplying electricity. So in the decade from 1982 to 1992 average residential power prices rose just 0.6 percent per year in real terms (above inflation) but increased 2.1 percent per year in the following decade. From 2003 to now, they’ve risen by almost 7 percent per year in real terms – that’s even excluding the latest GST rise.

This is why we told the 2009 Ministerial Review of Electricity Market Performance that “Consumer NZ believes this should be the last chance to make these de-regulated reforms work. If this review cannot deliver more reasonable price levels for all consumers, then the Government should look at managing the substantial parts of our electricity assets which are still state-owned so that they provide some benefit to the public – for example, by reintegrating the three SOE generator-retailers.”

As an example of just how much consumers are being rorted, the average family in Christchurch with Trustpower paid less than $1200 for their power in 2003. Today, Trustpower charges $2400 for the same amount of electricity – 105 percent more. Has your income doubled in the last eight years? Trustpower’s income from the average Christchurch family has.

While this is the worst example we can find, other retailers are little better – in the main centres, the typical family’s power bill has increased by 78 percent in the last eight years.

Residential consumers account for 34 percent of New Zealand’s power use and that figure’s risen only slightly over the past 30 years. The rest is used by commercial and industrial groups – the Rio Tinto smelter at Tiwai Point alone uses 15 percent. Industrial users (including the smelter) now consume 36 percent and the commercial sector 30 percent.

Industrial and commercial use has grown much more rapidly than residential-consumer use over the past 30 years. But from 1979 to 2009 commercial electricity prices fell in real terms by a massive 37 percent and industrial prices fell by 3 percent.

So it seems that residential consumers alone are paying the price for New Zealand’s increased demand – and that every year more of your income is ending up in the hands of power companies.

What can you do about it?

• You can encourage competition by using Powerswitch to compare prices and switch providers.
• You can conserve power around the home in lots of simple ways.

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