Source: Radio New Zealand
123RF
Consumer NZ is warning that power prices could rise at least another 5 percent this year, after a 12 percent increase in 2025.
Powerswitch general manager Paul Fuge said he thought that was a conservative estimate.
An increase of that size would be mainly driven by the next step in the process of increasing lines charges, he said.
As of 1 April last year, the amount lines companies could charge increased. The first step was predicted to be the biggest but there could still be changes year on year through to 2030.
“There has been some pressure on the electricity prices on the wholesale market so we might see some lifts in the energy price as well which is kind of residual from that dry year we had a couple of winters ago making its way through to retail prices.”
He said the experience around the country could vary. “I’ve seen some power bill [increases] already that are higher than 5 percent… it really depends on where you live and which retailer you’re with and what plan you’re on.”
He said it was common for prices to rise from 1 April but some retailers might choose to move at other times
Fuge said because New Zealand’s system was heavily reliant on renewable energy, it was subject to the vagaries of the weather, and retailers would price in the risk of a dry year, even when it did not happen.
“The pattern seems to be every three or four years we do have a dry winter and our storage is actually quite low, we’re never more than three or four months away from potential problems.”
He said prices were now 60 percent higher in real terms than when the market was reformed 25 years ago.
The Electricity Retailers Association earlier said electricity costs had been flat or declining in real terms for a decade but retailers had been passing on cost increases such as higher lines charges more recently.
“It’s quite a bad situation. So, you know, we saw a 12 percent increase last year,” Fuge said.
“It’s a massive jump in electricity prices … household gas had a 17.5 percent increase last year.
“It’s actually causing harm to households and the economy.”
Fuge was not convinced the plans for a liquefied natural gas import facility in Taranaki were the right solution.
Energy Minister Simon Watts said on Monday a contract was likely to be signed by the middle of the year. he said the facility would give more security and peace-of-mind for New Zealanders.
Fuge acknowledged it sought to mitigate the dry year problem.
“I just think there are better ways to do it. You can’t make cheap electricity with expensive fuel.
“It does seem like a bit of an own goal …we’re lucky in New Zealand, there’s so many low cost renewable options. The fact that we’ve sort of been backed into importing high cost fuels, you know, is a real own goal.”
He said people could still save money by shopping around, or moving to time-of-use plans if they could move when they used power.
“We would advise to have a look now. But it may be, for some people, you might want to wait until post 1 April to make sure you don’t get caught out with a price change.”
The government no longer funds Powerswitch and has plans to set up its own comparison site but Fuge said Consumer intended to keep it operating.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
