Personal finance editor Amanda Morrall gets plugged into power switching savings and strategies.

Personal finance editor Amanda Morrall gets plugged into power switching savings and strategies.

By Amanda Morrall

I am prone to flip-outs but I had a doozy the other day when I opened my power bill having recently returned from a two week holiday.

Despite my absence in the heart of winter (when all power use save an energy efficient bulb on my front doorstep was in hibernation) my bill had exploded by about $150 from the month before. Unless someone had set up an hydroponics operation in my absence I thought surely there  must be a  mistake. Sadly, neither appears to have been the case.

According to my power company, which estimates the bill every second month, the estimate for the month previous was way out and therefore the extra costs were added to my bill which I was expecting to be half given my absence. An explanation of this on my bill would have been nice.

I'm no power hog. I routinely turn out the lights, the kids bath less often than they would like, and I don't have any major power sucking appliances. The prime culprits as far as I can tell, are an oil-column heater and an electrical heater that are used in the morning and evening. The other suspect of course is the power company itself.

After the "Big Saturday" incident which saw wholesale prices spike 200 times because scheduled maintenance work (see our banking and finance editor Gareth Vaughan's story here) my consumer confidence in the electricity market was shorted.

Apparently, I am not alone.

In June and July of this year, more than 86,000 power customers flicked the switch on their provider because they could get a better deal somewhere else.

Since the May launch of a Government-sponsored campaign meant to stimulate greater competition in the industry, budget conscious Kiwis have been getting plugged into the concept of people power.

The number of changes registered this past June, represents a 58% increase in switching rates from the previous June. July's rates are similarly striking. The 11,474 consumers who changed power companies in July was a 37% increase from July 2010.

I was surprised by these numbers, reported by the Electricity Authority, a key driver of this push to promote greater consumer activism.

I had looked into switching power companies a year ago and determined, after a very tedious and probing conversation with my then power company, and a potential competitor, that the difference would be marginal. With that in mind, I have been mostly ignoring the consumer campaigns. The latest, "What's my number,'' had gone unnoticed until today, with the bill shock lingering.

Time to take a closer look.

According to the Electricity Authority, the average annual savings to be had from switching power companies is $150. They also estimate a potential national savings of NZ $240 million if all consumers were to switch to the cheapest provider.

The on-line guesstimate for my own household is just shy of $100 a year. It's not quite enough to compensate for last month's winter assault but $100 is a $100.

Andrew Hubbard, policy adviser for the Citizens Advice Bureau, says consumers would be silly not to take advantage of the savings.

He said the "What's your Number?" website (which logged more than more than 431,500 visitors in two months ending July) made it easy for consumers to shop around. The website allows users to profile their household consumption patterns and shop for the best price.

Before making an active switch, which is also possible on-line by linking through to another Website called Power Switch, Hubbard suggests giving existing companies the opportunity to match the savings.

Since the introduction of the campaign, he said power companies have become a bit more eager to please and therefore flexible on price.

Hubbard also cautioned consumers to check the fine print on their contracts or else get some clarifications about any potential break or connection fees that could negate potential savings. He said consumers should be careful not to get locked into any long term contracts given the elasticity in electricity prices and intensifying competition.

"It's worth going back again after six months to see if pricing has improved even further.''

Info and tips to reduce power consumption from PowerSwitch

Space heating

Heating your house accounts for about 29 percent of your bill.

  • Only heat rooms that are being used.
  • Draught-proof doors and windows.
  • Seal off open fireplaces when not in use.
  • Use curtains, preferably those that are lined and floor-to-pelmet (or touching the window sill), and close them at night.
  • Maximise the sunshine into your home in winter by keeping curtains open during the day and cut back trees that shade north-facing windows.
  • Because polished strip-timber floors leak air through the joints, reduce draughts and heat loss from these floors by insulating underneath them.
  • Use thermostats and timers on electric heaters.
  • Insulate ceilings and, if possible, walls.

For more information on home heating options and products, visit www.consumer.org.nz

Water heating

If you have an electric hot water cylinder, water heating uses up a whopping 30 percent of your power bill. But there are simple things you can do to make your hot-water system more efficient and save you money.

  • Fix dripping hot taps.
  • If your hot water cylinder doesn't have a 'Grade A' label, wrap it with a cylinder blanket.
  • Insulate the first metre of hot water pipe from your cylinder.
  • Have a user-adjustable thermostat fitted and set it to 60°Celsius.
  • Use a low-flow shower head to supply water at 6 to 9 liters per minute.
  • Limit showering time – a short shower uses much less hot water than a bath.
  • Wash clothes in cold water.
  • Fill the kettle or jug from the cold tap and only heat the amount needed.

For more information on water heating options and ways to save money visit www.consumer.org.nz

Lighting

Lighting makes up about 8 percent of your power bill.

  • Use compact fluorescent lightbulbs in high-use areas.
  • Turn lights off when leaving a room.
  • Maximise the use of natural light.

For more information on lighting options and energy efficiency, visit www.consumer.org.nz

Cooking and refrigeration

Cooking makes up about 7 percent of your bill and refrigeration makes up about 11 percent.

  • Use a microwave or pressure cooker where possible.
  • Use a steamer over a pot to cook more than one dish at a time.
  • Buy energy-efficient appliances.

For more information on cooking and refrigeration, including the best appliances for your needs, visit www.consumer.org.nz

Other tips

Washing machines, dryers, televisions, power tools, computers, and other electrical appliances make up 15 percent of your bill.

  • Rather than use a dehumidifier, ventilate the house and extract moisture at its source using rangehoods and bathroom fans.
  • Buy energy-efficient appliances.

More information

RightLight
Helping you make energy efficient lighting choices.

EECA Energywise
Practical information and advice to help you make energy efficient choices at home and on the road.

Saving energy at home – the Consumer guide
Simple ways you can save energy without blowing the home maintenance budget.

 

 

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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We had exactly the same experience. Our bill increased from $500 to $650 in July, we are with Mercury Energy. This was despite being away for a week and using no heating. There is no way of telling on the bill whether it is an estimated or assessed reading. If actual, then the only reason I can think of is that we were using more heating to reach the same ambient temperature, we have no real insulation at our rental.

The net benefit to the country if everyone insulated their houses and water cylinder properly is huge.

SimonP: Is that $650 for one month?

AmandaM: Do you ever check the meter readings and compare them to the invoiced readings charged, and in the case of an estimated bill and you have been away are you able to ring the power company and "tell" them the reading?

Now that I understand this guesstimation business I'll be doing that. My bill shock threshold is maxed out.

 

Yep. Our water cylinder is under the raised house with no insulation and two small heat pumps and a couple of oil heaters going full bore will only just keep the house temperature constant which is desirable when you have a new baby.

Fortunately we are shifting to a new warmer place next week as the property investor who owned our place went bust and the bank has now sold the house in a mortgagee sale.

 

FWIW .. This item was posted back in February in a discussion about Solar Power and Panels ...

By Iconoclast 28 Feb 11, 12:40pm
Alternatively .. A bit of electricity trivia .. mention it because haven't seen it mentioned anywhere, and usually when a loophole exists everyone is soon onto it and exploiting it ..  A friend in AKL hasn't gone solar, but gets his power costs down substantially by using http://www.powershop.co.nz, constantly monitoring their special offers, buying heaps of kw/h when prices are down around the $0.10c per kw/h .. you have to be in a smart-meter-enabled area .. and .. they install a smart meter which measures the power consumption by the quarter hour .. you can sit there in front of your computer and watch your bill going up by the quarter hour .. you can buy in arrears, or buy in advance .. if you buy in advance you can sell unwanted kw/h back at the higher price when the specials expire .. he is, in effect, a defacto urban electricity trader

http://www.interest.co.nz/news/52448/90-seconds-9-am-bnz-english-says-mo... 

I've not got a panda, or any interest in pandas, however you could try something like:

http://thepowerpanda.com/the-power-panda-2/

another type of timer switch, or just manually switch off your hw cylinder for periods of time.

I wonder if there is such a thing as a Gummy Panda?

 

Thanks for the tip.:)

Hi Mist - you got me worried so, of course, I checked Wikipedia:

http://en.wikipedia.org/wiki/Legionella

In terms of source control the article says "Moist heat sterilization" is one method:

Moist heat sterilization (superheating to 140 °F (60 °C) and flushing) is a nonchemical treatment that typically must be repeated every 3–5 weeks.

So, it seems one would be safe switching off totally for a day or two at a time. What do you think?

Switching off hw cylinder is something I picked up from my Dad and we never had a problem as kids and we don't seem to now - touch wood! (Just an aside, this savings startegy is only ok if you got a large tank.) Or maybe it's all that chlorine that's being pumped into ChCh water supply that is keeping us safe? Or, even before the eqs and chlorine addition, maybe all the other mind-control chemicals, like CCP (Canterbury Cows Piss) that surely must have been used for such a long time to befuddle logical thinking in the masses when it comes to effective asset/property/capital & gains taxation and acceptance of higher taxation while cows get off scott free. And dare I say it, a chemical that seems to invite a such irrational passivity toward the damage our present monetary policy (and system, Iain and Raf) wroughts on the nation to the supposed advantage of those cows, who some think are the backbone of the economy.   

I was shocked with my last bill from Mercury Energy as well. It went from my usual ~$140 to $205, and my power consumption for that month did not reflect the increased consumption typical for a cold winter’s month (remember how mild June was?) The amount of electricity used was only slightly above what I would typically consume in summer where my monthly bills are around $100. Yet it was still a 46% increase on a modest increase in consumption. I’m looking forward with great interest to see what my next one will be given that that will have the normal winter’s consumption on it.

Is it time for the Commerce commission to have another looking at electricity pricing in NZ?? I’m beginning to think so. I should add that I think there a some very strange things afoot!

I had an unexpected price rise with Mercury too.  The bills I was receiving seemed normal enough for the period from Feb to June, but I had recently switched to gas heating so I didn't know exactly what my bills should be.  When I did the PowerSwitch comparison I noticed that my power account had changed from low user to standard for no apparent reason and without notice and therefore my bills were substantially higher than they ought to have been,

I am amazed how folk let the electricity companies rip them off with estimated bills - and I am very surprised SimonP that Mercury do not say anywhere on your bill whether it is an estimate - it generally says 'E' next to the figure. I would challenge them about this.

The rule of thumb is simple - whenever you get an estimate, go down to your meter and check whether its accurate. If the estimate is too high phone the buggers up and tell them so they adjust that months bill downwards. If its too low dont tell them, it will eventually get charged to you when they do a reading and in the meantime you have earned interest on the money you didnt have to pay. And always make use of their internet early payer discount (usually a direct debit) - which saves 10% plus on the bill.

Folk should also look closely at the various tariffs available from each company. For example if they dont use much electricity (typically below 6000kWh or less per annum) they should consider switching to a low user tariff (the average price per KWh is typically lower on such tariffs). There are often embedded savings of 10% or so to be had by moving around between tariffs within any given companies price structure.

Our electricity bills are now zero. We have a solar water heater (even on a winters day here in Nelson (where ambient got to only 14C)  it has now generated a tankfull of water at 50C) and a 3kW solar photovoltaic (PV) system which generates enough electricity for the 2 of us to run everything else (with Meridian giving us a 1:1 exchange for generated electricity). If you live in a sunny locale with a north facing roof the economics of getting a solar water heater are tremendous. PV systems have come down dramatically in price and allowing a for an annual 6% rise in electricity prices (entirely realistic - the rise in the past 10 years was an avearge of 7%pa) the capital expense of our system is repayed in 12 years.

I can vouch for the effectiveness of solar water heating.  We have two panels facing directly north and they provide for all our (two of us) hot water needs from September through until May.  During the winter we will use electricity according to weather conditions and hot water needs. Two or three heavy overcast days will exhaust our solar heated water supply. Unfortunately solar water heating is not a practical option for house heating i.e., under floor heating, as its most productive months are in the summer.