Electricity prices about to rise

Friday, 19 January 2024

Two of the country’s “big four” power companies are raising prices for many of their customers, with Meridian Energy expecting to follow and Mercury yet to show its hand.

Contact Energy chief retail officer Matt Bolton said it would be increasing power prices for 12% of customers, who were on some of its open-term plans.

Those customers will see their power prices go up by an average of $2.98 a week from March 1.

The rise reflected “the increasing cost of energy, network and transmission charges” as well as inflationary pressures on the business, Bolton said.

Contact had made a decision not to increase gas prices, he said.

Genesis Energy said it would change pricing for 61% of its customers from February 23.

Only 11%, or 37,707 customers, would definitely see a price increase while 4% would see their prices fall, a spokesperson said.

The other 46% of customers would see some components of their bill rise and others drop, and the net effect could depend on whether they increased or decreased their power consumption, she said.

A common scenario was that their fixed daily charge would increase and the rate they paid per-kilowatt of power would fall, she said.

But, overall, Genesis expected the 57% of customers that would or could be adversely impacted would see their bills go up by an average of 1.6%.

Another 39% of Genesis customers were on fixed-term contracts, its spokesperson said.

Whether they experienced a price change down the track would depend on “which plan they rolled onto and any special offers available at the time”, she said.

Meridian Energy’s commercial head, Danny Wilson, said it reviewed its prices annually, and it was likely that some households would experience a price increase from April “given the ever-increasing costs we’re facing to operate our business”.

He said that at this stage Meridian was not able to confirm details, but it would contact impacted customers late next month.

“We acknowledge that many households are struggling with cost-of-living increases. As always, Meridian will endeavour to keep any price changes to a reasonable level.”

Mercury Energy declined to say whether it was planning price rises before April, saying it did not usually comment in advance on its plans and would communicate with its customers first.

The Consumer Advocacy Council, which was established by the former government to lobby on behalf of consumers and small businesses in the power sector, said it had no comment on the price changes.

The Government has yet to decide whether to allow power firms to further raise the fixed daily charge for the majority of households, who are on low-user tariffs, in April.

If it sticks with a plan set out by the former government to phase out the requirement for them to offer plans tailored for households that use less than about 8000 kilowatt-hours of power per year, the cap will rise by 34½ cents per day to a new cap of $1.38 on April 1.

But the plan to phase out low-user tariffs is subject to a “mid-term review” by the Ministry of Business, Innovation and Employment.

The review is intended to see whether the policy is having the effect that the former government desired of lowering bills for consumers who use more than the average amount of electricity.

Energy Minister Simeon Brown said he expected to receive advice from officials in February.