Price Changes Indicated

Genesis Energy have indicated they will be increasing their standard Electricity pricing from January 7^th 2020. In most cases by up to about 5 per cent.

The price increase are in spite of the aims of the Governments Electricity Price Review to lower customer pricing.

ENA chief executive Graeme Peters is concerned the reduced line charges and transmission fees due to come into effect as of April 2020 will not flow into consumers' pockets.

The Commerce Commission said that power bills should drop between $3 and $34 a month in most part of the country from April, as a result of new rulings that will reduce the revenues lines companies and Transpower can earn from their networks over the next five years.

But Genesis spokeswoman Kiely Evans said Genesis would be increasing its "standard electricity pricing" from January 7 "in most cases by up to about 5 per cent".

Genesis, which remains 51 per cent owned by the Government, said the "before and after" impact of its price rises would depend on the customer and the region. But on average, monthly bills in Auckland, Wellington and Christchurch would go up by about $9.

Evans said Genesis had reviewed its pricing following an "extended period of higher than usual wholesale pricing", but they do also look forward to distributors (network companies) confirming the details of any price reductions, "would welcome any opportunity that would enable us to reduce customers' prices"

Peters said the Electricity Price Review ordered by the Government last year and published in October was supposed to lead to more affordable power prices "but that's not happening".

"Prices are going up – as we see with Genesis and possibly others. "Network companies will be sending lower bills to retailers from April, but more than $200 million of lines revenue reductions look like they won't go to consumers – they will instead end up in the pockets of generators."

Peters added that he felt for small retailers, as they were being squeezed by higher electricity generation costs and didn't have a natural hedge from generation.

Energy Minister Megan Woods said Genesis' decision was a commercial one. "Consumers will make their own decisions about power providers based on this, We've had reassurances from other power companies they have no immediate plans to follow suit".

However, Contact Energy’s chief customer officer Vena Crawley confirmed it had raised some prices over the past few weeks, also referring to higher wholesale costs."With the Commerce Commission announcement, we will be keeping an eye on each of the network companies' proposed changes for early next year. We don't yet know how this will impact our customers," he said.

Megan Woods has said "I'd encourage people to shop around if they aren't happy with their power company."

This is where Switchme can help, use our easy online comparison tool to check you are on the best rates for your site www.switchme.co.nz

Prices to increase in the North

The Electricity Authority is proposing to move to a benefit-based approach to pay for the cost of transmitting electricity around the country. It wants to encourage the right sort of investment to cater for future need and direct the cost more closely to those who benefit.

Auckland and Northland power customers would end up paying more – and user in the south (like Tiwai aluminium smelter) would pay less, under the proposed changes.

"Consumers should pay for the transmission assets they benefit from, and not pay for those they do not. That's not how the current charges work," the authority said.

It proposes two new charges to replace the existing system - a benefit-based charge to recover the cost of new grid investments and the depreciated costs of existing investments, and a residual charge to cover any remaining transmission charges.

"Current charges spread the costs of regional transmission investments across all New Zealand consumers. This means some are paying more, while others are paying less, than the benefit they get from the transmission grid. Our proposal rebalances transmission charges so that those who benefit pay. It does not increase charges overall."

Under the changes, wholesale market prices would work alongside the transmission pricing proposed to manage peaks, he said. "The current peak charge sends the wrong price signals. Some consumers end up paying a premium when power is most valuable to them even when there is plenty of transmission capacity available.”

"What we're proposing is a more targeted and accurate way to signal grid congestion with significant benefits for consumers. We estimate that peak prices would be on average 38 per cent lower over 30 years than they are now."

Questions of how to manage power peaks are becoming more pressing as demand for electric vehicles increases. An increase in solar and other renewable energy production means generation is likely to become more diversified in future. Stevenson-Wallace said everyone would benefit from the benefits-based charging regime over time.

But a group made up of the Employers and Manufacturers Association (EMA), Horizon Networks, Federated Farmers, Northpower, Norske Skog Tasman, Oji Fibre Solutions, Top Energy, Trustpower, Counties Power, Entrust and Vector, said the proposed changes would make power more expensive for customers in the north of New Zealand.

Spokesman Alan McDonald, at the EMA, said those customers would be put into a position where they would already have had to pay once for past grid investments they had no control over, and would then pay for future upgrades in their area.

"There is potential for ongoing price shocks. But when people in Northland turn their lights on they won't be getting any better service than people elsewhere. Yet their bills will have gone up."

The authority's proposal includes a price cap for consumers and businesses connected directly to the grid to protect them from big price increases.

That meant that the Tiwai Aluminium smelter would get $11.3 million in discounts a year. By comparison, Northpower, Top Energy and Vector would pay an extra $10.5m, McDonald said.

McDonald said New Zealanders did not pay different amounts for their roads or telecommunications depending on whether they lived so it was not clear why they should pay differently for power.

Regional meetings will be held around the country after October.

Network Tasman Residential Pricing:
Currently the Lowest in NZ Despite Recent Price Increase

Here in New Zealand, the local distribution networks is split into 29 major areas.

While you are free to shop around and compare pricing, contracts and incentives when choosing a retailer, the network company in your area will remain the same.

Network Tasman: Currently the Cheapest Energy Provider

Leading the pack of cheapest networks (currently, anyways!) is Network Tasman.

Even after increasing their electricity prices by 1.3 percent at the beginning of April, Network Tasman still provides the cheapest electricity rates in New Zealand. The recent increase adds a mere 68 cents per month (excluding GST) for the average residential connection.

Remain the Cheapest Electricity Distribution Company in NZ

Out of the 29 major electricity distribution companies found throughout New Zealand, Network Tasman is the cheapest. That’s before any discounts are even taken into account!

The company’s main focus on providing good value for money is accomplished by keeping price increases to a minimum while remaining committed to maintaining their core electricity networks. The safety, reliability and capacity of their networks always remain a priority.

Currently Almost 40,000 Consumer Connections in South Island

As the owner and operator of the electricity distribution network in the greater Nelson and Tasman areas (minus Nelson City), Network Tasman distributes power to almost 40,000 consumer connections.

Wholly owned by the Network Tasman Trust, a consumer trust, Network Tasman provides power to the north-western corner of the South Island.

Regulated by the Commerce Commission

Network Tasman’s “commitment to good value for money” is not just for marketing purposes! Their line charges over the last two years have averaged $2 million annually below what the Commerce Commission permits to charge as a regulated electricity lines company.

Plus, Network Tasman’s prices charged to retailers for using both the electricity distribution network and the national gride amount to approximately one-third of retail electricity paid by consumers.

Switchme can help make sure you are on the best rates available!

While you can not change the network company supplying your property, Switchme can help you compare pricing for your area. For almost a decade, Switchme, New Zealand’s largest, non-governmental funded energy switching site, has been helping Kiwis save on their energy bill. By offering an online, easy-to-use calculator, Kiwis are easily able to compare energy prices.

The online switch application only has three steps, which means you can start saving energy costs quickly!

For your business, Contact Switchme today to learn more about how we can help you identify and switch to the best energy providers in your network region. Start enjoying the cheapest pricing rates in as little as five days!

Recent Price Increases in the Energy Industry

Change continuously happens in life and New Zealand’s electricity distribution industry is no exception! Here are some of the latest changes regarding our power suppliers.

Powerco’s Price Increase Will Help Upgrade Network

In order to fund a $1.27 billion upgrade to its network, the Commerce Commission recently approved Powerco’s price increase application.

Deeming the upgrade necessary to maintain a safe, secure and reliable network for customers, the Commerce Commission approved the price increase as of April 1.

As part of the application approval, Powerco is required to report on its investment to both the commission and its consumers on a yearly basis.

Wellington Electricity’s Rate Increase to Help with Earthquake Preparedness

An additional $31 million was approved by the Commerce Commission to help improve the network’s resilience to major earthquakes.

Last December, Wellington Electricity had submitted their urgent application which documented the need to strengthen its substations and purchase emergency equipment and critical spares.

The investment is expected to cost the average Wellington Electricity consumer an addition $1.70 each month.

Potential Rate Increases in the Future for Aurora

In early March, electricity provider Aurora (which serves Dunedin, Central Otago and Queenstown) started an independent review of its electricity network to pursue a price increase. The electricity provider’s older network is in need of repairs, which the price increase (if approved) will help cover.

The company has already notified the Commerce Commission of its desire to launch a customized price path (CPP) beginning in mid-2020. If approved, the distribution line charge on customers’ bills will be increased to fund future network investment. The actual price increase has yet to be decided.

This past December, the company finished a $30 million fast-track pole programme, which saw 2800 of the network’s worst poles replaced.

Over the upcoming decade, an investment of more than $700 million is planned by the company to improve its ageing network.

Commerce Commission Plays a Part in Price Increases

Although any lines company can apply for a CPP (with most applications seeking line charges to fund network upgrades), the Commerce Commission closely analyzes applications.

The end goal is that a balanced price-quality path for both companies and consumers can be achieved.

Switchme Helps You Get the Best Rate!

With the constant changes in New Zealand’s electricity industry, you need a trusted ally to help you get the best rate! That’s where a Switchme comparison comes in.

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Higher Energy Costs Coming from Wellington Electricity

When earthquakes happen in the Wellington region, thousands of Kiwis are affected.

The only way to minimize an earthquake’s effects on this power grid? Make the electricity network stronger so that it can become earthquake-proof.

Wellington Electricity’s Recent Application to the Commerce Commission

When its rates were initially set in 2014, Wellington Electricity (WE) had no way of knowing the resilience expenditure that would be required. That’s why Wellington Electricity, which distributes power to approximately 166,000 homes and businesses in the Wellington region, formally applied to the Commerce Commission last December for a customized price-quality path.

The Commerce Commission has initially approved WE’s recover cost proposal.

Wellington Electricity’s Proposal to Recover the Costs

When the earthquakes happened recently, WE had to bring in not only enhanced communication systems but also emergency hardware, switchboards and mobile substations. Plus, seismic reinforcement was necessary for the substations.

To help recover the cost of these unexpected expenditures, WE has been given the go ahead to charge regional consumers an extra $1.90 to the consumer’s average bill of $160.

This monthly increase will help recover the $31 million needed to earthquake-strengthen the capital’s electricity network.

It’s expected that as long as the cost of energy and other components go unchanged, monthly bills will be reduced the following year due to the lower transmission charges from Transpower.

Commission Agrees to WE’s Proposal

The Commission views the extra expenditure as being costed appropriately and is confident that it will make the Wellington network better situated to withstand a major earthquake.

WE will need to prove that it has made the resilience improvements and will be penalised for under-delivery.

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Are you finding your power bills too high? Most power companies have had a price increase as of the 1st April 2016 and winter is now on its way too. If you have not checked you are on the cheapest power plan recently, now is the time to do it.

Power companies tend to review their prices in April because that is when changes to lines charges are passed through to retailers. A number have put up their charges recently including Genesis Energy, Mercury Energy and part of the Contact Energy network.

Some companies have offered customers the chance to lock in current prices, sometimes with a premium, to avoid the hikes.

Carl Hansen, chief executive of the Electricity Authority, said customers should take the opportunity to check they are on the best plan for their households.

"It's always a good time to check you are still on the best power deal for your circumstances, particularly as power use changes coming into winter. This is especially true if you haven't checked your options recently."

He said most of the April changes for this year had taken effect.

"But it's a dynamic market and many electricity retailers offer discounts on their standard prices. If you've had an increase, it's worth having a chat to your current retailer to see if they are able to sharpen the deal. If not, it's definitely worth checking to see whether switching could save you money."

Use Switchme.co.nz to check out the different offers available to you.

Source: Stuff.co.nz