Energy crisis: How to save money as residential users face power price spike

• Wholesale power prices have doubled in three weeks, which will flow down to residential consumers.
• More than a third of people rank energy prices as one of their top three financial concerns.
• Consumer NZ has simple tips on how households can save money.

With warnings Kiwi households should be prepared for their electricity prices to jump, several agencies have outlined ways people can save money.

Wholesale power prices have doubled in the past three weeks. This has been blamed on the low levels of New Zealand’s hydro lakes. Consumer NZ told the Herald retail power companies, and residential consumers, were shielded from current wholesale prices, but they would eventually flow down.

Consumer NZ communications and campaigns manager Jessica Walker said more than a third of people were already ranking energy prices as one of their top three financial concerns. Walker said higher prices “will increasingly start happening in around 2-3 months and into early next year”.

How to save money

“The quickest and easiest way to save money is to compare and switch power providers,” Walker said.

“The average saving available to people who use Powerswitch to compare providers is now over $500 a year,” she said.

Powerswitch is a free and independent service run by Consumer NZ. It is partly funded by the Electricity Authority, the independent Crown entity responsible for regulating the country’s electricity market.

The Herald used Powerswitch to compare electricity plans at an address in West Auckland. The cheapest plan’s estimated cost of power for August was $148, and the most expensive was $216 on a plan tied to wholesale prices.

Shifting electricity usage to off-peak times, such as setting a timer for electronic appliances like washing machines or dishwashers for the middle of the day or night, could also see big savings if people were using a time-of-use energy plan, Walker said.

Taking shorter showers, running heat pumps efficiently, and turning appliances off at the wall could also help make small differences, she said.

Walker detailed how to get the most out of heat pumps: Setting them between 19C and 21C, turning up the fan speed rather than the heat, and cleaning the filter every two months.

Consumer NZ has also dispelled a myth about how efficient it was to run a heat pump continually.

“People think that it’s more efficient to keep a heat pump running all the time. This is incorrect – make sure you turn your heat pump off overnight and when you leave the house,” the watchdog’s website said.

Walker said people should “also look for power-hungry appliances that are not used much. Running that old beer fridge in the shed might be costing households a lot more than they realise.”

The Electricity Authority has also outlined tips, including washing clothes in cold water, opening curtains during the day to allow the sun to heat homes, stopping draughts, using the right-sized heater for the room, and using an electric blanket to keep warm.

Raphael Franks is an Auckland-based reporter who covers breaking news. He joined the Herald as a Te Rito cadet in 2022.