Customers of spot price power retailers have seen their bills jump in recent weeks as wholesale electricity prices have spiked.
Two small retailers exposed to the wholesale market, where prices vary every half hour, have also shut their doors. Dunedin-based Payless Energy and Nelson retailer Power Direct have both stopped trading.
Low lake levels and an outage on the Pohokura gas pipeline have contributed to the latest spot-price hike. According to the Electricity Authority, these conditions have resulted in hydro storage being drawn down to historically low levels for this time of year.
Some retailers have also claimed spot prices are being distorted by the behaviour of the big generators. Electric Kiwi, Flick Energy, Pulse Energy, Switch Utilities and Vocus last week made a complaint to the Electricity Authority claiming this behaviour was harming the market. These allegations have yet to be investigated by the authority.
The number of consumers who’ve seen their bills rise as a result of the latest price rise is small. Only about 1% of consumers are on spot price plans.
Expectations are that spot prices won’t drop back to previous levels anytime soon. If you’re on a spot tariff and want to switch, use Powerswitch to see what rates you can get from other retailers (with the exception of Electric Kiwi and Nova, which aren’t accepting customers switching from a spot price plan).