Proof Shopping Around Means Savings

Proof Shopping Around Means Savings

The verdict is in: if you haven’t been shopping around for a cheaper electricity retailer, you’re likely paying more than those who do.

According to a recently released report from Miriam Dean QC, those who shop around end up paying a better rate on their energy costs than those who do not. Here are the details.

New Zealand’s Residential Energy Market Prices is Record-Breaking High

Over the past 28 years, residential electricity prices have increased by almost 80% (after inflation). During this same time period, commercial prices have decreased by 24 per cent and industrial prices have increased by 18 per cent.

As part of the coalition agreement between Labour and New Zealand First, the review found that since 2000, the country’s residential prices have increased quicker than many other OECD countries. That’s why it’s crucial that customers take the time to research other electricity retailers for cost savings.

Two-Tier Market Developing

After inflation, an increase of almost 50% has developed between the least expensive retailer’s price and the incumbent retailer’s price since 2002.

When shopping around, consumers often get confused while comparing prices and contracts. Many consumers are confused by the details in the various plans which can lead to difficulty in choosing the best one for their needs.

Other consumers are missing out on money-saving discounts. Prompt payment discounts, which can be as high as 26 per cent of the energy bill, are often missed out by low-income consumers.

Late-payment penalties can also quickly drive up the energy bill’s costs.

Many Barriers Blocking Fair Competition in NZ’s Residential Energy Market

Although New Zealand has approximately 35 electricity retailers, the big five (Genesis, Contact, Mercury, Meridian and Trustpower) command more than 90 per cent of the market. They are better equipped to offer incentives for customers to remain with their company, preventing a more competitive market from developing.

This makes it difficult for the small to medium-sized electricity retailers to expand.

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