Bay consumers overpay $39 million for power

By Allison Hess, Kim Fulton

Bay of Plenty people overpaid for power by more than $39 million last year, according to the Electricity Authority. Photo/file
Bay of Plenty people overpaid for power by more than $39 million last year, according to the Electricity Authority. Photo/file

Bay of Plenty consumers overpaid for power by more than $39 million last year, according to the Electricity Authority.

A new report on the performance of the residential electricity market in 2015 showed Bay of Plenty people could have saved $39,182,815 or $331.25 per household last year by switching to the cheapest deal available.

Bay of Plenty households stood to save the most of any region.

Tauranga Budget Advisory Service manager Diane Bruin said queries around electricity bills were one of the main things the service dealt with at this time of year when bills tended to be higher.

Advisors always told clients to check out power switching website, but to be aware that their cheapest option today might not necessarily be their cheapest option in six months time.

People should return to the website at least annually.

Mrs Bruin said she had seen clients save money by switching companies.

They sometimes assumed their spending was normal before realising there were other options.

The Bay of Plenty Times last week reported the region had one of the lowest switching rates in the country.

In 2015, the Bay of Plenty ranked 12th out of the regions in terms of switching activity. That was despite there being between 14 and 17 power companies to choose from.

Carl Hansen, chief executive of the Electricity Authority, said the authority's figures didn't account for any secondary discounts.

The Bay of Plenty was the only region in New Zealand where customers could get a rebate from the local electricity trust only if they had Trustpower as their retailer.

Trustpower general manager of commercial operations Chris O'Hara said Trustpower had very low customer losses for a range of reasons including their long history (90 years) in the area and Tauranga customers received distributions from TECT that were a share of all Trustpower's profits.

He said prices were reviewed every year based on changes in energy and retail costs and line charges.

"Currently the Trustpower part of our Tauranga prices are frozen so the only increases relate to line charges."

A Meridian Energy spokesman said the best way to save on power in the long term was to monitor and manage electricity usage.

"We offer a number of tools and advice to help our customers become more energy efficient."

He said the most frequent price changes were triggered by price changes from line companies, which were typically passed onto customers annually.

A spokesman for Genesis Energy said it regularly reviewed its electricity and gas pricing for customers.

"Pricing is influenced by a range of factors including wholesale electricity market prices, lines charges, and the cost to run our business."

He said Genesis also provided transparency of customer's energy consumption, with online tools such as a mobile app.

Bureta man Barry Hayden switched power companies last year and had already saved over $1000.

He said he was getting a reasonable rate from his previous provider but, like most consumers in New Zealand, he did not feel he had much control over how much he was charged.

"I just felt Electric Kiwi gave me more opportunity to have more control over the amount of money I spend on electricity.

"They give you a free hour a day of electricity, during off-peak times."

For his average family home, with a swimming pool and electric water heater, this deal worked out cheaper.

"We pump the pool and heat the water heater at a time when electricity is free.

"It maximises the benefit of the deal and it feels good to have some influence over what I'm paying," Mr Hayden said.

It was not complicated to have a look around and compared what different electricity companies were offering, he said.

"The rules allow for us to change providers without too much trouble, just educate yourself about what's out there and you might be surprised you could save a little money."

New Zealand households overpaid for power by more than $300 million in 2015 by not switching to the cheapest electricity deal available, according to the Electricity Authority.
The lowest average savings were in Hawke's Bay, at $135 per household.

The report showed smaller independent retailers were serving nearly 80,000 customers in 2015, an increase of 12 percent during the year.

Head of Powershop Mark Soper said smaller retailers were having a hugely positive effect on the market for consumers, driving price competition and reducing market concentration across the country.

Data from the Ministry of Business, Innovation and Employment showed the average residential cost per unit of electricity in the year to March 2016 was 1.7 per cent lower than in the previous year.

"Despite lower prices, too many households are still overpaying for power by hundreds of dollars by not switching to the best deal available," said Mr Soper

- Bay of Plenty Times

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