Electricity Authority urges consumers to smarten up, shop around and use people power to push down prices. Your experience?

Electricity Authority urges consumers to smarten up, shop around and use people power to push down prices. Your experience?

By Amanda Morrall

Increased competition in the power industry and the emergence of new players in what has traditionally been a tightly regulated monopolistic environment is pushing down prices with switched on consumers driving the movement, says the country's Electricity Authority.

The Electricity Authority's "What's My Number?" campaign, credited with procuring average household annual savings of $150 a year and triggering a 400% increase in the number of consumer initiated moves to change power providers, is hoping this year for a similarly positive uptake.

Chief executive Carl Hansen said consumer savings are slated to be even higher this year owing to an increasingly competitive electricity industry. The Authority this year is estimating average savings at around $165 per household.

With power prices worldwide predicated to continue a steady upward trajectory, Hansen said consumers needed to take a more proactive approach to savings, holding their own power company to account or else taking their business elsewhere.

Encouragingly, Kiwi consumers are starting to shed their complacency, he observed.

When the Electricity Authority kicked off its campaign last year, it anticipated 50,000 unique visitors to its "What's my number?" website after three months. It reached those numbers within three days.

In an attempt to broaden its reach and tap even more consumers on the shoulder, the Electricity Authority has channelled resources into training budgeting advisors and others working with the public to encourage them to find power savings.

Its training has been extended to the Citizens Advice Bureau, the Federation for Family Budgeting Services and Working for Families.

Savings for SMEs too

The Authority, this year, is also trying to awaken small business to potential savings on their power bill. In June and July, it plans to roll out a complementary programme aimed at small and medium enterprises called Request for Price (RFP).

Hansen said it'll work similar to a broker service where the best rate is obtained to fit the needs of a particular business.

"It has the opportunity for SMEs to really get into this game,'' said Hansen.

While critics, including Victoria University's Geoff Bertram quarrel with the Authority's claim of increased competition in the industry (see Amanda Morrall story here for more), Hansen points to a drop in the Consumer Price Index on power as proof of change.

For the first time in 13 years, power prices charted by the CPI dropped for two consecutive quarters, .3% in the third quarter of 2011 and 0.5% in the fourth. 

The Authority calculates the combined savings for New Zealanders over that six month period at NZ$8 million and forecasts potential saving of $23 million annually if those savings were sustained.

"It's a significant value gain for customers," he said.

 Citizens Advice Bureau policy advisor Andrew Hubbard cautions consumers against making the switch before reading the fine print. He said break fees and other penalties could negate any savings to be made by switching. (See Amanda Morrall story here for more). 

In an open market, Hansen said it was reasonable that companies would try to retain customers through various means and suggested it was incumbent upon consumers to exercise caution and awareness before entering into any contracts. (For more on the importance of fine print, read this.)

Based on the success of "What's my Number" to date, Hansen said he's hopeful consumers are becoming more switched on.

"What we are really wanting to do with this (campaign) is to embed in the New Zealand culture a shopping around mentality for electricity. We want New Zealanders to realise that electricity keeps flowing into your home and if you don't do something proactively about it, you end up paying a higher price than you need to."

See also these tips from Power Switch on how to save money through reduced consumption

 

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, visitwww.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 visitwww.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, visitwww.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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Increased competition in the power industry and the emergence of new players in what has traditionally been a tightly regulated monopolistic environment is pushing down prices with switched on consumers driving the movement, says the country's Electricity Authority.
 
Competition among 4.3 million users for a system geographically spread along two narrow islands the length of the US eastern seaboard?
 
Who is kidding who? Business will never underwrite the risks associated with the capital cost of generation for such difficult terrain hosting a small widely flung population.
 
Let's drop the dogma and get on with installing the infrastructure as our forefathers did under the state auspices of the NZED and flog the stuff at the cheapest possible replacement cost price from the stables of regional state owned distributors. 
 

Dead right Stephen.  The principle cost/price determinants are the choices made when planing and building generation and how optimally the whole generation system is run to maximize free renewable energy.  Competition is barely relevant; infact can result in higher costs through destructive market gaming of hydro reserves.  Salary costs for Meridian are about $20m out of $2,000m total sales, Increasing organisational efficiency is irrelevant. 
One of the frequent complaints by politicians and "energy experts" when the NZED ran it all, was that power was too cheap.  Well they have certainly fixed that one. 
There is no need to sell these valuable assets as our government debt to GDP ratio is 96th out of the 115 OECD nations.

Chris:  Being 96th is a pretty good record, especially when measured out of a total of 34 OECD countries!
http://en.wikipedia.org/wiki/Oecd
 

Sorry Philly.  You got me going back to my source which was an address last year on the subject by Rhema Vaithianathan of Auckland University.  http://dl.dropbox.com/u/11111592/Vaithianathan%20Nov%202011.pdf
You are right it was not stated as the OECD or any particular grouping.  A further correction, it was 113 nations. 
Point is the same however, we don't have a government debt problem.

do you have any evidence of 30 v 80?  urls?
otherwise uh....in the summer my bill is about $180 a month v $300 plus in the winter....so space heating is easily the biggest single draw.
NB I looked at hot water via solar and a $7.5k system would take over 15 years to pay back....so I really wonder on your 80% number because 30% sounds closer.
regards
 

I don't understand how multiple generators and retailers each with their own highly paid CEO and management staff, offices and other dupplicated resources can give you better power prices than a single well run SOE. As Stephen said above, in a country of 4 million doesn't sound efficient at all. If ever there was a natural monopoly it was electricity.

With power prices worldwide predicated to continue a steady upward trajectory, Hansen said consumers needed to take a more proactive approach to savings, holding their own power company to account or else taking their business elsewhere.
 
Note the reference to world prices apparently determing the local trend.
 
Check out this trend/trajectory and demand to know why NZ consumers are only seeing a hike in local gas prices.
 

New Zealand has very high electricity prices- especially when the vast majority comes from renewable hydro- our lakes may not have the performance of the Norwegian dams but we are still well out of line with our pricing. This was sort of acceptable (not really) when it all went back to government as it was an indirect tax. But how long will we put up with it when the difference between what we pay and what we should pay- say the world price for hydro as a benchmark- suddenly goes to private hands.
 

We have to pay for the upgrades and replacement of our natinal grid, hence our prices are rising.
Sure it could go private, but I wonder what Govn would get or stay elected in NZ if it went for that....But otherwise yes there was apparantly considerable glee in the private sector when NZ was selling its assets such as these.....in effect we are handing them a state sanctioned monopoly.....some suggested they could easily persuade us to pay international power prices, despite the fact we earn way less.....
Fools we are....
regards

Amanda, Stop spreading message that there is a competition in power generation market - there are no two or more power stations at the same lake - real competition.
There are no two or more cables to my house for competition - those are hidden monopolies - just endorsed by Nuts.

have you seen the price of LEDs?  sure in the USA LEDs look a reasonable price when replacing, but you cant get most of them in NZ....and what you can get are silly money, $40 v $5 for less output, like duh....
What I have noticed is I suspect the quality of the CFLs is frankly going to pot.....I think the quality is going down hill as some of my 6+ year old bulbs are going well.....but Im finding that I am now replacing the 2 or 3 year old bulbs every 2 or 3 years.....and they dont come to full power for some minutes.....the old ones do not do that....a few seconds at most, at twice the age.....
My latest swap out is new bathroom light with a 32watt fluro, a new bulb is $10 so its cheaper than 2 CFL compacts by $5 and should last 5+years easily...it also comes to full power straight away.  Ditto my kitchen, new lights there, std twin 2x 5ft fluros....should last years and are $8 each....
regards
 
 

Is not all about money?
Meridian, buys your leccie back 1:1 if you go solar/wind etc.
Meridian is all green and has no coal based power stations (100% Renewable).
Since I care about Planet #1 and have not found a Planet #2 I will stick with the greenest supplier/reseller and not vote supercali-fracking-ilisticexpialidocious National any more and hope whoever gets into power in the future gete more renewable sources built before oil is $300 a barrel.

Im not so sure we will see $300 in real terms.....our global economy collapsed in 2008 at $147USD.....(which at today's inflation adjusted price is $159USD)....
So I think its more likely we see a depression as it climbs higher which will kill demand and hence price. The result of that is we will be so broke that at even $80USD it will seem too much...
Wew ill nee dmore power as more and more of our economy moves to electricity however, so yes we need more wind and tidal.
 
regards

Spot on @tony.

If you live in an apartment in Central Auckland like I do you may not be able to use this calculator. 
Powerswitch says that short tenancy times and because some buildings have special bulk energy deals it makes it impossible to compare - in my particular area - may be different in other areas/regions?. 
 
 
 

A couple of weeks back the head sherang of Contact was having a right old bleat about the terribly low price of power, uneconomic, weak demand etc. Said we need to pay more. Reckons the 6% return to his shareholders (i.e. mostly Orogin Australia) was totally inadequate  (or the share price is too high?) and us Kiwi households better get ready for a good old Aussie shafting.
Now my wife reads meters, one of the outfits they are contracted to is Contact. She is always reporting faulty or tampered with meters. The other companies sort it out pronto. Not Contact. Some of these meters have been faulty and reported as such for many months and in several cases for years but Contact does nothing. The chances of them recovering anything from their "customer" is remote.
This prick, that can't even run his business properly, wants us pay for his incompetance and up our power bills. Get rid if you're with this sorry lot.  

did he whine that his share price was down a shed load as well?
LOL....
oh dear........
6% return on an effective monopoly in times of a severe recession is quite reasonable IMHO...
regards
 
 

Well I went offshore for my price.....so I thought I'd...look around a bit
http://en.wikipedia.org/wiki/Electricity_pricing#Global_electricity_price_comparison

Is it my imagination or has Report Comment just resurfaced....? cripes now I'm in for it...where's that off color probe got to...?
Steven could you update that Wiki with the mean average for N.Z. as ours is undisclosed to the world at large and may be another immigration attraction we are not capitalising on. ....Ta.

I mow my lawn...wouldn't have it any other way.....I guess, I fear no one else can do it as well....no easy answer to it...untill I can do it no more.
 Then I guess lifes not fair.
Be well Sorel...mow your lawn.

We get phone calls at home from our provider asking us to lock in a higher, long-term rate  to protect us against "likely" future price rises.    I think those loveable Kray twins used to have the same kind of sales patter.    
 

Power prices will go up - I think everyone knows that.  Selling them off gives the govt two advantages:
1) Dodge responsibility for future higher power prices "What can we do - it is the market that sets the price!"  
2) Show by example to overseas capital markets that NZ can martial the political will to sell assets if required. Thus we get to keep accessing capital at lower rates.
Does this seem right?

This article has a different take on power price deflation.
http://www.stuff.co.nz/business/opinion/6719901/Power-prices-are-heading-one-way-up
What I don't understand is why is there such a variance in price between residential, commercial and industrial users.  Don't they all use the same electricity?