Why have your electricity bills gone up?

Saturday, 5 July 2025

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Are you paying more for your electricity? If so, you are not alone, as widespread price increases hit consumers across New Zealand.

But why have people’s power bills gone up, and where is this money going?

What’s going on?

Last year, the Commerce Commission announced it had agreed to increase revenue limits for national grid owner Transpower and local lines companies.

The move, they said, was due to increasing costs for material and labour, higher interest rates, and rising levels of investment in the electricity network.

As a result, households were expected to see their power bills increase by $10 per month ($120 annually) on average, from April this year.

At the same time, electricity distribution companies don’t have to charge to the revenue limits, they can charge less if they wish to.

The commission said that although people will pay more for their power, this will go towards maintaining and improving the electricity network. It said further delays would lead to even higher prices down the track.

The cost of operating electricity infrastructure contributes to around a third of consumers’ power bills.

Consumer NZ told Stuff on Wednesday that, on average, electricity prices were 11% higher now than at the start of 2025, before the changes came in.

Prices were relatively flat over the past five years, Consumer NZ said, due to regulated line charges set by the Commerce Commission falling during that period. That offset the increases in the actual energy component of bills, which rose faster than inflation.

What has increased, exactly?

A significant portion of the price change is due to increases in transmission and distribution charges, which are the costs incurred from owning and operating power lines, power poles, and other assets needed to transport electricity.

Transmission and distribution charges comprise around a third of consumers’ overall power bill.

According to the Electricity Authority, your monthly power bill is broken down on average as follows.

Consumer says that, on average, electricity prices were 11% higher now than at the start of 2025.

38.5% generation - this is the electricity you use.
24.5% distribution - the building and maintenance costs of electricity infrastructure.
11% retail - the power companies’ operating costs.

Government concerned about rising power prices, and in part blames the Labour government for stopping exploration for natural as.

8% transmission - costs towards building and maintaining the national grid.
13% - GST
4.5% meter - costs towards reading and maintaining your electricity meter.
0.5% levies - this goes to organisations that operate the electricity market.

A lot of the price increases will go towards maintaining and improving the electricity network.

So, how much worse off am I?

Several factors come into play when determining how much your power bill increases.

First, you might pay more or less depending on how much electricity you use and your pricing plan.

How much an electricity company decides to raise their prices can also come down to the number of consumers over whom the costs are spread.

Meanwhile, where you live can also be a factor, as different power companies in other areas will set different price rises.

For example, at the low end, those with Wellington Electricity (Wellington region), Orion Energy (Canterbury region), Electricity Invercargill (Southland region), Vector (Auckland region), Unison (Bay of Plenty/Hawke’s Bay), and Nelson Electricity, would see an estimated $10 per month average increase in the first year.

In the mid-range, those with Network Tasman, EA Networks, Powerco (Taranaki, Whanganui, Manawatū/Northern Bay of Plenty), Horizon Energy (Southern Bay of Plenty), Firstflight Network (Hawke’s Bay) would experience an estimated average increase of $15 per month.

At the top end, some people can expect to pay up to $25 more. These include customers with Alpine Energy and Top Energy.

Have customers felt the impact?

The answer would have to be yes, if a recent Consumer NZ survey is anything to go by.

Consumer NZ told Stuff that the impact on customers has been real because of the price increases.

Their latest annual energy survey said that 20% of people struggled to pay their power bill in the past year, and 11% cut back on heating due to cost.

They also found that 8% were declined as customers due to previous payment issues, and 35% of people surveyed ranked energy as a top-three financial concern.

The new limits are for five years and will be reviewed again in 2030.