A woman who was told by a power company that she should put on more clothes is just one of hundreds of New Zealanders who have told RNZ they are struggling with power bills this winter.
Patricia, whom RNZ has agreed not to identify, said her power bill of $420, for herself and two children, made her feel as though she was drowning.
“I adjust weekly payments to suit paying it off before the next bill, I’m now at $120 per week. I asked what can I do to the power company – they suggested we wear more clothes.”
Another woman said her power bill had increased from $204 in April to $475 in August.
She said her power company told her she would experience a 9.7% increase. “In reality my increase was 133%.”
“It has been much colder lately and because I live with chronic pain and asthma we have had to use some heaters. I was very mindful about this, because of the email I got saying my bill would only go up about $37 a month. I expected the bill to be a bit higher, but not this much more.”
In another case, a woman who said her power bill had never been more than $150 was upset to be billed more than $200 three months in a row. “I have not done anything differently. Shocked is an understatement.”
Another household said they had a bill for $719.49, including gas. The power component was $303.86. A family of four with one person working from home most days and two small children paid $827.33 last month, again including gas.
Another family of four said theirs increased year-on-year from an average of $350 to $851.32 at their last bill.
Power bills hitting hard for many
The Electricity Retailers Association said most households would have noticed bills being a little higher this year.
“That’s largely because electricity lines and transmission charges increased in April after a Commerce Commission decision allowing them to increase their revenue to support greater reliability in the transmission and distribution infrastructure – but other electricity system costs have increased too.
“We know this comes at a time when many families are already under pressure. Our members have significant consumer support in place, so anyone who cannot afford to pay their electricity bills should speak to their electricity retailer as soon as possible.
“Our members try to make any changes as clear as possible, and we’d encourage anyone who gets a surprise bill to talk with their retailer – they may be able to suggest a different plan, smooth payments, or connect them with other support, if it’s needed.”
Powerswitch general manager Paul Fuge said there were a number of reasons why bills were hitting hard at the moment.
“On average, retailers have lifted electricity prices by around 11% this year. Because retailers notify price rises in advance and most households pay bills in arrears, there’s a lag before the full impact shows up. Many consumers are only now seeing the impact of those increases.”
He said winter power bills were also often 20% to 30% higher than summer because people used more electricity in winter.
“This year that natural increase is being compounded by higher unit prices, so many consumers are being hit with a double blow.”
The ongoing phase-out of the low-user charge option was also pushing up bills. This scheme allowed people to pay a lower daily charge in return for higher prices for the power they actually used. It is being phased out in stages, which increases the daily fixed charge for people on that plan.
Fuge said changing household behaviour was also driving up bills. More people were working from home and as the cost-of-living rose, people were going out less often.
Gas prices had gone up about 15%, he said.
“We are increasingly worried about affordability. Our latest survey found 20% of households already struggled to pay their power bills, and that was before the most recent round of price rises.
“Consumers are clearly under pressure. Powerswitch data shows record switching activity: our site traffic surged 75% year-on-year in July, and switches initiated jumped 170%. Calls to our advice line rose 103% compared with July last year. The good news is that households can still save $400-$500 a year by changing provider, but the fact people are scrambling to find cheaper deals is a symptom of increased prices and a market that’s failing consumers.”
The Electricity Authority recently begun some work to try to level the playing field for new electricity retailers, which have complained the market structure is an impediment to competition.
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‘Largely irrelevant window dressing’
Economist Geoff Bertram said it was “largely irrelevant window dressing”.
“The market structure was and still is deliberately designed to push prices up and keep them there.”
Fuge since the site added an AI bill reader a few months ago, it has found a number of people are on old, legacy plans.
“In many cases, these plans come with much lower daily charges and cheaper rates than what the same retailer currently offers.”
He said sometimes people could have been overlooked, particularly when a power company merged with another one.
“In other cases retailers may be phasing customers on old plans on to higher rates gradually to avoid sudden bill shock that could cause them to leave.
“Our advice to anyone on one of these older plans is to stay put until your retailer advises you’re being moved onto the new pricing. The Powerswitch calculator does assume retailers keep customers’ pricing up to date. But if you’ve effectively been “lost” on an old plan that’s no longer offered, the rates on Powerswitch may not match. That’s why we always encourage people to check the rates showing on Powerswitch against what they are actually currently paying before they change provider.”