1 April 2022

April power bill shock in store for many

It’s never been so important to check if you could save by switching.

You might want to brace yourself for a bigger power bill than normal this month. We’ve been trawling through notifications sent by power companies to their customers about price rises kicking in on 1 April – and some people are in for a big shock.

While some customers are facing only modest annual price increases of $100 or so (or, in a few cases, even a slight decrease), we have also seen examples where some unfortunate households will see annual costs rise by $1000.

In what our expert on power prices Paul Fuge is calling the “perfect storm”, there are four ways bills could be hit.

First, there’s the industry’s phasing out of low-use power plans, which has given companies permission to double how much they currently charge low users for having electricity supplied to their home.

Second, people with a gas connection will also be affected by gas companies getting the green light to charge more for supplying gas, to recoup some of the cost of their infrastructure.

“The biggest losers will be low-use dual-fuel consumers – that is, consumers who use lower than average amounts of electricity who are also gas users,” Fuge said.

See our recent articles on the changes to low user charges and increasing gas prices for more details.

And finally, the actual prices of both power and gas used are going up for a lot of people, as we’ve seen in letters notifying consumers of price changes taking effect from 1 April. Many upset consumers have shared their stories with us.

“April 1 is traditionally the day power companies put their prices up, but this year is shaping up to be a real doozy,” said Fuge, Consumer NZ’s Powerswitch manager.

“It’s a perfect storm, all these changes have come together simultaneously. Just one would be bad enough.”

Consumer chief executive Jon Duffy shared his notification from his retailer which shows it’s not just a matter of a few extra dollars each month. His family’s bill for their Wellington home is one hit by a quadruple whammy of rises. Their power company will put up the daily charge for supplying power and gas as well as the cost of the power and gas they use. Within a year they will pay about 25% more, which will be $850 more (about $70 a month).

At Consumer, we’ve been as busy as beavers this month updating the prices in our Powerswitch database. Duffy said he’d be checking out now much he could save by switching to another company. Updated power prices will be available on Powerswitch from Monday, 4 April.

Fuge said it literally pays to check Powerswitch: “If the power companies were all putting their prices up it wouldn’t matter so much, but we’re seeing quite a different approach to the low-user plans and other changes across the various retailers.”

“Some are putting it up as much as possible, some are just putting it up a little, while other retailers are leaving low fixed charges at their current levels for the time being. Because of this, it’s really important to check you are not paying too much. A retailer or pricing plan that was once considered a lower-cost option may no longer be so.

“Many consumers tell us they just want to find the cheapest deal but find electricity pricing, discounts and all the different providers’ various offers a bit overwhelming. We get it. It’s mind-bogglingly difficult for consumers to make sense of it all. That’s why Consumer NZ provides Powerswitch, our free and independent electricity and gas price comparison service. If you want to find the cheapest power, visit Powerswitch.org.nz. It only takes a few minutes and you could save hundreds.”

$1000 for half an hour’s work

Many customers will have received letters recently from their power company telling them of today’s changes. But while Fuge said a lot of people would have a bit of a grumble and then just throw the notice in the bin, he had an amazing example of why you should take action instead.

His colleague at Consumer, Kirsty, had shown him the notification letter she received from her retailer. The amount Kirsty would spend on gas over the next 12 months was going up so much – $906 a year – that Fuge wondered if there’d been a mistake.

“I really thought they might have put a decimal point in the wrong place or something, so I said she should contact them and ask if there had been a mistake.”

An email back from the retailer offered to put Kirsty’s household on a different plan that would see her pay $52 less for gas over a year than what she had originally been paying – saving her from having to pay nearly an extra $1000 over the next year!

Kirsty was so brassed off with her retailer, she used Powerswitch to find another provider – who, as it turned out, had an even better deal for her. It really does pay to know the deal.

Member comments

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Steve
24 May 2022
Always worth keeping folk in “the know”

Following my previous comment, savings with Electric Kiwi have been reasonably impressive using the Movemaster plan BUT……

…..have just been advised by them that their variable rates will increase but ~12% (inflation is what…..?) from mid June! The daily fixed rate for low users remains at 30 cents.

Somewhat ironic that their explanation is that their suppliers are greedy.

Steve
26 Apr 2022
Always worth keeping suppliers on their toes

I’m a low user, the highest monthly bill I had with Contact was $242, and that was in 2009. I moved to Mercury that year, and It was almost exactly 10 years before I got a Mercury bill that exceeded this!.

Interestingly, Powerswitch did recommend Contact as a second option. There wasn’t much in it about 2% by their estimate (and actually their estimate of yearly usage was on the high side for me).

I think the big difference for me right now is that I am home most of the day and can time shift some usage (I do note Contact have a deal with “free” power between 9pm and midnight), but it’s very hard to get the rates they charge at other times.

I’ve just got my first bill with Kiwi Electric and it is only for a part month (15 days). Their charge was $40.82. Modeling the previous deal I was on with Mercury (including “discounts”), they would have charged $49.98. So roughly 18% saved. I’m expecting that saving to be greater during winter (in Dunedin) when I’m running a Heat Pump During the day.🤔🙏

Dwayne B.
03 Apr 2022
What Consumer conveniently leaves out...

What Consumer don't tell you is that they actually supported the government decision to abolish low-use power plans. I kid you not.

Don't ever trust Consumer to do the best thing for actual consumers.

Oh, and don't necessarily trust the results from their Powerswitch service, either - it's not entirely accurate as it doesn't correctly factor-in the benefit of many promotions that come when you sign-up with a new energy retailer.

Really, what is the point of Consumer these days, when they can't get the basics right?

Frank - Consumer staff
04 Apr 2022
Re: What Consumer conveniently leaves out...

Kia ora, in our submissions on the Electricity Price Review, we warned the removal of low-user tariffs could result in price rises for low-income consumers and recommended further research be done on the issue. You can read our submissions here: https://www.consumer.org.nz/articles/about-us-submissions.

Esther M.
02 Apr 2022
Genesis

We're also with Genesis , on lowest price plan and no letter received about increase. Yet. Did a comparison some time ago that confirmed we were on a very reasonable plan. But this may well change. Gulp!

Sandy
02 Apr 2022
Genesis

Im with Genesis and haven't had any letters....yet. Does this mean the prices aren't going up for me as it stands. I'm assuming they have to give written notice first??

Leo K.
02 Apr 2022
Time to renationalise.

Yet another legacy of the 1980s Rogernomics privatisation “reforms”. The New Zealand Electricity Department once provided cheap power for all. Now we have people unable to cook and heat their homes.

Andrea S.
06 Apr 2022
This is the legacy of our inept politicians

Max Bradford did his best to fix what wasn't really broken, John Key sold off the last of it so his mates would have something to spend their tax cuts on.

We have legislation that encourages generators to spill water so the electricity spot rate would go up. The latest government was going to fix the power retailers and give us all a fair deal - like they did with the supermarket duopoly and the petrol pricing.

Why do I sound so cynical?

Steven P.
02 Apr 2022
The daily charge is nothing more than pure profit for electricity providers

1. You already pay a lines charge in the per kW rate you pay.

2. In the modern day of apps, PDF emailed bills, what is the real daily cost to service a customer? A few cents to nothing?

3. That unbelievable announcement last year from Labour allowing the abolishment of the low power user is seeing the prices rise for real people, monthly bills doubling and power companies pocketing more money for absolutely zero effort or increase in service.

4. Just when we need to conserve resources, we remove the only real incentive to save power.

5. Lets remembers these are huge price increases for retired pensioners, apartment owners, 1-2 person families as $ 9 per month standing charges becomes $60+ per month, all without paying a single kW of actual electricity.

5. Lastly, the promised savings, everyone will be better off is of course a fantasy with prices increases already.

Shame on Labour.
Shame on Megan Woods (Minister of Energy - she signed off on this.)

Simonne M.
02 Apr 2022
Hesitant about changing

I am a low user and Meridian are doubling the daily charge. They've reduced the price per unit a little but I will still end up paying over $120 per year extra. There are other providers who are cheaper as they haven't increased the daily charge yet, but if they do in the future, and at the same time don't reduce the per unit price then I don't know if I will be better off. I really don't know whether to take the risk on another provider or not.

Donna T.
05 Apr 2022
Now is Good

Simonne, now is a good time to jump. Find a better offer and make the switch now.
Should prices rise after that then identify the next best deal and vote with your feet again. Changing is effortless really and even if it is only a few dollars, it is your hard earnt money staying in your pocket.

Karl O.
02 Apr 2022
changed to Genesis

Nova adviced me price going up changed to Genesis got cheaper rate plus $150 creit and 11% discount.

Dave F
02 Apr 2022
Powerswitch login

This might just be me but I find it extremely irritating when organisations set up forms, have you enter your information needed for the service and then, before you can see the results, force you to sign up to their site.
Put the sign up requirement at the start or give an opt out.

John C.
03 Apr 2022
powerswitch login

Absolutely agree Dave F, powerswitch needs to be upfront with the need to register, although there is a skip option on the login/register page

B A S.
02 Apr 2022
The problem being

you jump to another company and they then hike their rates.

Karl O.
02 Apr 2022
lock in for year

I locked my in for year with Genesis - doesnt cost anything to switch