Consumers are likely to see a big bump in their energy bills this month, up to a 10 percent rise for some.
The prices rises come after the Commerce Commission approved lines and transmission price increases which came into effect on Tuesday.
Consumer NZ’s head of Powerswitch Paul Fuge said there were three components to the increases: lines charges, a phase-out of the low user component and the actual energy costs.
Lines charges, which are the prices power companies are allowed to charge, are regulated by the Commerce Commission.
These are set every five years and the next interval began on Tuesday with price rises approved due to increased costs.
“That’s the lion share of the increases we’re seeing.”
Another thing that was changing was the low user component of the lines charges was being phased out, meaning a 30-cents-a-day increase, Fuge said.
Around 60 percent of households would be paying $1.50 a day instead of $1.20.
The third element was the energy costs themselves.
“That’s the variable bit. That’s the cost of the electricity you actually use and there’s pressure on those prices as well … Last year we had an energy crisis and that’s pushed prices up on the wholesale market and those will eventually flow through to the energy market.”
Around 90 percent of people were paying more than they needed to for their power because they were on the wrong type of plan, Fuge said.
Many households would save around $500 a year if they changed their provider or their plan.
“And that for most households would save most of these increases.”
He encouraged people to go on to the Powerswitch website, which had been operating for 25 years to help consumers.
While energy companies were making profits, the Commerce Commission had done “a good job” of regulating them and ensuring any price increases were justified.
“Unfortunately, costs have increased over the last five years and they will be passed through to consumers.”
Consumer NZ has been pushing for a long time for changes to the electricity market which was not working as intended for consumers.
However, it was encouraging the government was looking at some initiatives and reviewing the market.
“We’re keeping a close on that and hope it continues.”
