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Home / Business / Personal Finance

Diana Clement: How to get the best power deal

Diana Clement
By Diana Clement
Your Money and careers writer for the NZ Herald·Herald on Sunday·
19 Aug, 2017 05:00 PM4 mins to read

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Money can be saved by changing your ways. Photo / NZME

Money can be saved by changing your ways. Photo / NZME

Diana Clement
Opinion by Diana Clement
Diana Clement is a freelance journalist who has written a column for the Herald since 2004. Before that, she was personal finance editor for the Sunday Business (now The Business) newspaper in London.
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I would love to go off grid, but it's unlikely to happen and in the meantime I still need to pay my monthly power bill.

There are ways of making that bill more palatable.

In June 2017 more than 42,000 households switched provider for a better deal, says Electricity Authority chief executive Carl Hansen. The average annual saving was $164.

The easiest way to find a better deal is to use one of the comparison websites such as Powerswitch.org.nz, Glimp.co.nz or SwitchMe.co.nz.

Each has a slightly different engine and it's a good idea to cross reference the results from all three.

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Deals through these sites - and also from annoying door-to-door salespeople - may be better than those offered direct because the power suppliers know the websites for switching companies are a great way to nab new customers.

Make sure you're comparing apples with apples and, for example, GST is included.

The waters are muddied by introductory offers as well as discounts for dual fuel or other services such as broadband.

I'm always wary of Fly Buys and Airpoints. As a nation, we love them. Invariably, however, you'd be better off with the discount up front than the points.

To see how much you can save, look at your recent bills and work out total household power use.

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If it's less than 8000kW for 12 months, make sure you're on a low-user plan that juggles the daily charge /kW price matrix in your favour.

Combining your power, gas and broadband to receive one monthly bill may seem logical and can be a bargain but you can lose transparency, which might mean you are overpaying, says Andrew Cooper, general brand manager at Electric Kiwi.

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Get a spreadsheet or calculator out and compare your combined bills against individual energy and broadband deals.

At the end of July an astounding 40 retail brands were registered with the Electricity Authority. The big five are Genesis Energy, Contact Energy, Mercury, Meridian Energy and Trustpower.

Five new players have entered the market in the past five years alone.

The smaller players come with such catchy names as Paua to the People, Tiny Mighty Power, megaENERGY and Flick Power Co.

The effect on competition has been notable. Paua and Flick offer spot-based tariffs, which means prices drop when wholesale rates go down. Most other energy retailers have fixed charges.

With this type of deal where prices fluctuate, consumers could in theory choose to run their washing machines, dryers, and dishwashers on timers to take advantage of lower rates at different times of the day.

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Of course spot prices can rise sharply, as they have at times this winter, giving customers short-term bill shock.

Shopping around isn't always about scraping the barrel for the bottom dollar. Great customer service can be a drawcard. I called several providers posing as a customer and Mercury had the shortest waiting time and the easiest to understand employee.

But I might just have been lucky.

A Glimp.co.nz survey of users who switched scored Electric Kiwi first and Flick second for overall satisfaction ratings.

Being charged fixed prices for a guaranteed period can offer customers certainty, which is important for many. Apps and other tools from providers such as Genesis and Powershop make tracking use easier than in the past.

Key issues to take into account before switching include contract length, break fees, payment terms, direct debit and online payment discounts, and sign-up deals, says Hansen.

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If you can't be bothered changing supplier, you can telephone your existing provider and ask them to offer you a deal to stay.

I called Genesis Energy. I had dropped off my previous contract and could get a $150 discount for signing another 24-month deal, which might appeal to someone who wanted to pay less but didn't want the effort of switching.

Even more money can be saved by changing your ways.

Energywise and other organisations are continually telling us to turn our appliances off at the wall when not using them, to use timers, to insulate our homes, and to install double or secondary glazing on windows.

Think twice about how you use your heat pump, too. If you set the temperature too high or run it 24/7, you may well be paying more than you would using basic electric heaters for fewer hours.

A recent Consumer article caught my attention because it pointed out if you're already paying the daily charge for gas, certain types of gas heating might be more cost-effective than a heat pump.

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