Power prices are now rising faster than the rate of inflation, and Powerswitch is worried that the current model is thriving on customer “confusion and inertia”.
Stats NZ data shows electricity prices were up 2.3 percent month-on-month in April. Gas prices were up 1.1 percent.
Powerswitch data showed, year on year, the fixed daily charge for gas was up 25 percent year on year on average, and 33 percent on average on a per-kilowatt-hour basis.
For electricity, the fixed charge was up 21 percent year-on-year, while a 24-hour price per kilowatt hour was up 12 percent and a night rate 13 percent, on average.
Powerswitch general manager Paul Fuge said electricity pricing was highly variable and complex. His data used the most common standard plan and did not take into account low fixed charge plans.
“There are thousands of plans, prices change unevenly across retailers and regions, and a plan that was once cost-effective may no longer be. Individual household needs also change over time, further complicating matters.
“Many people are surprised by how much prices vary. Those who switch plans using Consumer NZ’s free Powerswitch tool save nearly $500 per year on average. Even non-switchers can use the tool to negotiate better deals. There are thousands of electricity plans available across the country, and what one household pays can differ markedly from another-something that often surprises people.
“Retailers often don’t notify customers when cheaper plans become available, so consumers need to be proactive in checking their options regularly.”
He said things like fixed and variable charges affected households differently.
“For example, rising fixed charges may have little effect on high-usage households but more on low-usage ones. This makes it difficult to generalise about annual price changes. The opaque and inconsistent nature of electricity pricing leads to confusion, apathy, and mistrust. Consumer NZ argues this is unnecessary and advocates for greater transparency, consistency, and simplicity in pricing.”
He said electricity prices were now rising above the rate of inflation.
“Some retailers have highlighted that electricity prices were below inflation over the past five years. While technically true, this is somewhat misleading. The key reason is how line charges – the regulated part of your bill – are set.
“The Commerce Commission regulates these charges in five-year cycles. The most recent cycle began on 1 April this year and brought significant increases. By contrast, line charges fell in real terms during the previous cycle, when inflation was lower.”
He said the retail model thrived “not on value or service, but on confusion and inertia. As a result, countless households are overpaying by hundreds each year”.
Bridget Abernethy, chief executive of the Electricity Retailers Association, said data from the Ministry of Business, Innovation and Employment showed the energy component of power bills had come down in real terms over the past 10 years.
The lines component had come down in real terms between 2014 and 2024, she said, as had the overall cost per unit of electricity.
