Electricity bills shake-up: Annual checks to keep households on cheapest plan

Power prices are a major pain point for many Kiwi households. Photo / 123rf

Power companies will be forced to tell customers once a year what the cheapest plan for them is under new rules on the way.

The Herald and advocacy group Common Grace campaigned for this change as part of the Power to the People series on energy hardship last year, when only two mainstream energy companies confirmed they checked if customers were on the cheapest plan – although one said it would no longer offer the deal after being bought by a big player.

The new rules would protect consumers by improving electricity bills, preventing large back bills and requiring power companies to regularly check their customers are on the best plan they offer, the Electricity Authority Te Mana Hiko chief executive Sarah Gillies said.

They come into effect from October 30 and will make bill information clearer and more consistent, and make it easier to compare plans, with improved prompts directing people wanting to check for better deals to the authority’s new and independent comparison and switching website.

Large back bills would be limited to a maximum of six months to reduce the risk of bill shock for households, and power companies would have to help people change – at no cost – to another plan under required annual checks, Gillies said.

The changes were about strengthening retail competition and empowering consumers with clearer information, making switching plans easier and protecting against back bills, she said.

“We’re giving people better information about the power they use and pay for, so they have the confidence to shop around.

“We also want to reduce the stress of unexpected back bills for households and small businesses.”

Standardisation was also part of the changes, with new product information standards requiring retailers to provide structured and consistent information about their power plans, Gillies said.

“This will improve the accuracy of comparison websites, and bring transparency, accountability and long-term value for New Zealanders.”

The authority was launching a new comparison and switching website soon, a site that would be free from commercial interest and designed to keep pace with changes in the electricity market, she said.

About 1500 electricity consumers provided feedback during consultation, with more than 90% supporting the proposed changes.

The authority would also soon begin consultation on options for the revised Electricity Information Exchange Protocol for retailer product information to ensure plan data is consistent, accessible and fit for accurate comparison and switching tools.