High Wholesale Prices Creating Low Switching Rates
Fortunately for Kiwis, saving on electricity costs is normally easy to do.
In only a matter of minutes, switching websites display energy price comparisons and will facilitate the switching process for you. The process is actually so streamlined that there is no interruption in your household’s or business’ energy services!
But compared to the last four years, electricity switching is at an all-time low, and it has to do with high wholesale prices.
Thirteen Percent Decrease in Switches Recently
February 2019 saw only 30,340 customers change energy suppliers which was 13 percent less than one year prior.
The number of switches experienced in both January and February was a four-year low.
February’s Best-Performing Brand
While offering an incentive of one free month of power on a 12-month fixed deal, Contact Energy experienced the most success in February compared to other energy providers.
More than 1,200 customers were added to its customer base – the company’s biggest gain in over seven years.
Electric Kiwi, the second-largest gainer during February, now has almost 40,000 customers.
Low Number of Switches Caused by High Wholesale Power Prices
Since jumping in price during October 2018, wholesale prices have not levelled out. A variety of factors is to blame for the elevation, including declining North Island hydro storage, extensive irrigation demand on the South Island and limited gas supplies caused by maintenance work at the Pohokura field.
Recent cold, still weather also contributes to the price increase. Wind production has been reduced at the same time maintenance work at several plants decreased geothermal and hydro production.
The extended high wholesale prices have made it especially difficult for newer independent retailers to make customer gains.
Retailers Relying on Spot-Based Products Most Affected
Although limited power supplies are felt by all energy retailers, those that rely on spot-based products experience even more ill effects.
Flick Electric’s customer base had decreased recently due to higher spot market pricing, and they released a Fixed pricing option as an alternative to their fully spot market offering.
With power prices what they are these days, it’s in your best interest to keep a close eye on your energy bill! Switchme makes it easy! Join our email list to be notified of future price increases in your area.