The Importance of the Government’s Review of Electricity Prices
Prior to last year’s election, Labour, the Greens and NZ First government parties all promised thorough reviews of the country’s energy sector.
And now’s the time that we see those promises come to fruition.
The New Zealand government announced that it will be conducting an energy sector review. This review will examine the price of electricity and determine what (if any) changes need to be made to keep the market fair for customers.
The Importance of a Review
Have you been noticing your power prices steadily increasing over the last several years?
If so, you’re not alone.
Over the last few years, New Zealand’s power prices have increased faster than inflation – a cause for concern to our country’s leaders.
The problem has been recognized for some time and certain solutions have been implemented already. For example, the “winter energy payment” option that the government implemented has helped lower-income New Zealanders heat their homes during the winter.
However, the reason why power prices continue to increase has never really been thoroughly examined, which is what this review intends to do.
What's Involved in the Review?
Even though you pay only one price on your energy bill, the cost of getting that power to you is much more complicated!
Power costs arise from various stages: generation (hydropower, geothermal or wind), transmission, distribution, retail and consumption. The review’s main purpose – to investigate the causes of the rising electricity costs – will examine all five of these stages.
At the same time, the review will determine if changes need to be made to the rules and regulations surrounding the energy industry.
The review will also look at how new technologies such as electric vehicles and solar panels can be better managed by the sector.
The Implications of the Review
With the increasing use of these new technologies, the government needs to ensure that our energy sector will be able to successfully handle the influx.
Plus, the review aims to ensure there is greater transparency surrounding energy bills and fair pricing for customers.
More competition and consumer benefits will also likely be a result of the review.
Getting Ready for the Future
The last decade alone has seen New Zealand make huge advances in the energy sector. Having a review completed at this stage will help ensure we are prepared for the future!
To see if you’re currently getting the best price for your household’s power consumption, check out Switchme and complete a comparison today.