The heaters have been left on, people have lingered in the shower a minute or two longer, and the kettle has been boiled for a few more cups of tea in the past couple of years.
By Tessa Parker
Yes, that’s right, Kiwis have been chucking more money at their power bill.
According to MBIE statistics, the average New Zealand household has spent an extra $122 a year on all things electrical since 2017.
It’s further proof of a cost of living crisis, says National leader Christopher Luxon.
Taking aim at the Government, he says this illustrates an example of it allowing every day expenses to run loose.
“Labour has let inflation get out of control in this economy, New Zealanders can't afford the essentials like power, like rent, like food, like petrol,” Luxon says.
“The power is symptomatic of a really broad set of essential items that prices are going up dramatically and Kiwis are getting hit with that every single day.”
But, Anna Kominik, chair of the Electricity Retailers’ Association's independent board, says the average household’s power bill can largely be explained through Covid-19 restrictions.
The third quarter of 2021, when the country was placed in lockdown, saw one of the biggest spikes – an increase of $65 compared to a few months prior, when Kiwis weren’t forced to go home, stay home.
“The increase relates to the ‘Covid-effect’ of multiple lockdowns over the past two years - which saw Kiwis staying at home for long periods of time and naturally drove up electricity usage,” Kominik says.
In real terms, the electricity bill has come down $25 since 2017, she says.
To the plain eye, electricity prices have increased 4.4% between December 2017 and December 2021. But when taking the 7.7 per cent inflation in the same period into account, then the real terms prices have decreased.
Furthermore, she argues that there is strong competition between the power companies that is pushing the price down.
Luxon doesn’t agree with her justification.
“The reality is even power per unit is more expensive today than what it was in 2017 when the Government came to power... what we really have to do is focus on the bigger issue, which is how we manage inflation in this economy.”
Low user plans going
Putting lockdown and inflation aside, inevitable price increases are on their way. On April 1 the Government will begin a five-year phasing out of the 2004 Electricity Regulations.
The lower fixed charge tariff regulations are intended to reduce power bills for low-income households, forcing companies to provide a low-use option, where you could pay a discounted daily fixed charge of 30c, to cover costs of connecting to the network.
But in 2017, the Electricity Price Review found the regulations didn’t help but hindered most low-income households and encouraged the Government to leave them behind.
Nova Energy says it is amending prices in line with the regulations and low-use customers will see their daily charges jump up 30c a day.
Energy Minister Megan Woods told Fair Go earlier this month she expects power companies to be very open about why bills are going up.
“Rest assured, we’ll be watching that really carefully and I’ll be talking with the power companies about that.”
Read more: Fears older Kiwis hit hardest by scrapping of low-user energy plans
In a press release, the National Party says it expects more action over power prices.
“Back in 2017 the Energy and Resources Minister commissioned the Electricity Price Review because she was concerned power prices were ‘putting pressure on household budgets’.
“Yet under Labour power bills have only gone in one direction – up. So once again, we’ve got a Government that is all spin and no delivery.”
There are worries that the easing of these regulations and resulting increase in prices will hit senior citizens the hardest.
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