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.
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."
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
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 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
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.
Helping you make energy efficient lighting choices.
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.