Households hooked up to reticulated gas are facing average price increases of 10% to their energy bills, according to Consumer New Zealand.
Residential users must pay a fixed daily charge for gas as well as electricity, which can make gas uneconomical if a household is not using it for heating, water and the stove.
The Eady family from Wellington was paying about $30 a month for the daily line charge but just $5 on actual gas consumption because it was just their stove connected to gas.
Ditching gas was a “no brainer”, said Jason Eady.
“We were just giving the money for nothing to be honest.”
About 300,000 homes in the North Island have gas piped into them, but for those considering removing their gas there can be extra costs.
The Eady’s were still charged the fixed daily fee even after disconnecting and were told by their provider Nova Energy the only way to stop that charge was to pay to remove the meter.
Consumer New Zealand powerswitch manager Paul Fuge said it was unnecessary to remove the meter and urged people to challenge that.
“We don’t think people should be paying that, it seems unfair to be charging consumers for not taking a service.”
Nova Energy said it incurred fixed daily charges from the network company until a site had been disconnected from the network.
It is also charged daily meter charges by the meter owner until the meter has been physically removed.
“These ongoing charges are beyond our control and are a necessary part of maintaining the infrastructure that delivers gas services to our customers,” it said in a statement.
Commercial growers feeling the pinch
Industrial users, such as the methanol plants in Taranaki, use the lion’s share of gas. Industry uses 90% of the country’s supply compared to 10% for residential use.
Gas is also used in commercial greenhouses to grow products like tomatoes, capsicum, and eggplant for the domestic market, providing heat plus carbon dioxide to boost the crops.
But some growers are feeling the price increase.
“That price over the past five years has gone up by 200% in some cases,” said Vegetables NZ chief executive Antony Heywood.
He said growers also had no certainty of gas supply with most only getting short-term contracts.
“Most are working month by month on any gas contract they have.”
Heywood said there is an energy crisis and that growers were on a “knife-edge” trying to make sure product was on the shelves.
Gas New Zealand, which represents the industry, said not as much new gas has been coming online as expected, but exploration continues.
“We’re not going to run out. There will probably be changes in the market and I wish had a crystal ball to tell you what those are going to be but there will continue to be gas especially for residential users,” said chief executive Jeffrey Clarke.
South Island households, which only use bottled gas, are not as exposed to the price rise because there are more plentiful supplies. About 30% of LPG bottles are imported. Consumer NZ said there is no evidence of price increases for bottled gas.