Source: Consumer NZ
Too many households are paying more than they need to for power. With significant energy price increases looming, Consumer NZ calls on New Zealanders to check for cheaper options to help offset higher bills.
With rising energy costs, New Zealanders are facing a challenging winter. Price increases are already being implemented, with major retailer Mercury notifying an average price increase for its customers of 9.7% and others expected to follow suit.
Powerswitch encourages consumers to take advantage of its free comparison service to ensure they are not paying more than necessary.
“Analysis of Powerswitch data shows users can save, on average, almost $500 a year by checking for cheaper options. Such a saving would effectively offset upcoming price increases for many households,” says Powerswitch manager Paul Fuge.
“We find most households coming to Powerswitch discover they are paying more than they might need to. For example, 93% of users could find savings of more than $100, 73% could be saving more than $300 and 61% of users could potentially save more than $400.
“Escalating energy prices could make a bad situation even worse, so it’s more important than ever to make sure you’re getting the most bang for your buck.”
Energy costs emerged as one of the top three financial concerns for consumers in Consumer NZs latest quarterly Sentiment Tracker online survey. Such a rating is an indication of how energy affordability is increasingly impacting lives across the country.
Similarly, in Consumer’s last annual energy survey, 20% of households said they struggle to pay their power bills, with 11% reporting living in cold homes after reducing heating to cut costs.
Household concern about increasing power bills is likely contributing to an increase in the use of Powerswitch.
The warmer summer months typically have the lowest household power bills, so summer is traditionally a quieter time of the year for Powerswitch. But not this year. In the past four months (December to March), more than 10,000 customers used Powerswitch to initiate switching to a cheaper power deal. That’s a 48% increase compared with the same period last year and the highest recorded for this four-month period since Powerswitch was set up.
Powerswitch’s comparison tool has been helping New Zealanders save money for over 25 years now. The service’s primary purpose is to help people find the most cost-effective power company and pricing plan for their household. Awareness of Powerswitch has grown substantially during this time to 62% of those surveyed in October 2024.
According to Consumer, cost is a significant reason to switch energy providers, with 45% of people making the change due to price hikes.
Changes in circumstances, such as getting a big bill (25%), and changes in household circumstances, such as moving (22%), also drive switching behaviour. Satisfaction with current providers and the perceived effort required to switch act as barriers to switching.
“Saving $500 or more is meaningful for most households right now. That could look like a large grocery shop, Christmas presents for the kids or more savings”, says Fuge.
A big chunk of the price rise noted by consumers is due to increases in what the electricity lines companies can charge. Lines charges typically make up around 40% of a household’s overall power bill.
The Commerce Commission completed a review of the revenue limits for lines companies and indicated households would see an increase of $10-$25 (excluding GST) a month to pay for higher distribution and transmission costs. Auckland lines company Vector announced an average increase of 21% to its charges.
How to compare and check your plan is cost effective
Powerswitch is a free and independent service that compares 15,000 residential power plans from 16 providers.
The website and call centre service allows people to input some simple information, including their address or details from their last bill to compare prices and click switch in just five minutes.
The tool is funded by the Electricity Authority, which is an independent Crown entity tasked with governing and regulating New Zealand’s electricity industry.
New consumer care obligations took effect on 1 April. These regulations aim to provide further protection for customers by requiring power companies to provide clearer contract terms, easier access to consumer care policies and processes to support customers in financial difficulty.
For more information and to compare power plans, visit powerswitch.org.nz.
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