Electricity Authority takes closer look at price increases

The Electricity Authority Te Mana Hiko (Authority) has requested more information from power companies about higher power prices and whether further increases are expected ahead of winter.

The Authority estimates most households face average increases of around 8% to their power bills ahead of winter, on top of last year’s 8% increase. Most of this year’s increases came into effect on 1 April and showed wide variation across the country and by retailer, ranging from 1%-11%.

“On average, if your monthly power bill was $200, this latest increase could add another $16 a month. That’s a big difference to most households when many people are already stretched,” says Andrew Millar, Electricity Authority General Manager Retail and Consumer.

A range of factors determine how much a household’s power bill might change, including who their power company is, what plan they’re on, and where they live.

“We know lines charges are increasing this year,” Millar said. “That part of your power bill is regulated by the Commerce Commission, and accounts for around one-half to two-thirds of these increases. We want to know more about is what else may be pushing prices up. This is why we’ve formally asked power companies with more than 1% market share for more information to explain what’s going on.

“We’ll take a close look at that information and follow up if the data indicates anything unusual or unexpected. Once we’ve completed our review, we’ll share what we found,” Millar said.

While the Authority doesn’t set power prices, addressing the impacts and the causes of higher prices is central to its work.

“One immediate action people can take is to see what you can save on Billy, our comparison and switching site, launched last month. This will make it easier for people to make sure they’re on the best possible power plan for their household.”

More than 96,000 people have already visited Billy to see if they can get a better deal by switching power companies.

“From October, we're requiring large power companies to offer a pricing plan that gives consumers cheaper rates for off-peak electricity. Later in the year, all power companies will be required to make their power bills clearer and easier to understand, and regularly check their customers are on the best plan they offer.

“The Authority is focused on ensuring the market settings across the electricity system are delivering for New Zealanders. We’re using the levers we have to promote competition, encourage investment in new generation and create efficiencies in the system. All of these things aim to strengthen the electricity system and bring prices down in the long run,” Millar said.