Kiwi households and businesses are facing another increase to their power bills, with some customers facing a new hike before Christmas.
Continually rising power prices have become a major cost-of-living pressure in recent years. While wholesale electricity prices have fallen, higher lines charges are still pushing power bills up.
From April 1 next year, the low fixed charge scheme will be fully phased out, meaning lines companies will no longer be required to stick to low fixed charges.
Some Contact Energy customers have been told their rates will increase from December 3, while Genesis Energy says "most customers" will experience price increases.
Contact did not answer questions about increases, but told 1News: "We are doing our best to keep power prices as low as possible."
Genesis said some customers could also see decreases in their power bills, or a cost change when one fuel goes up in price while the other comes down.
"The majority of affected customers are expected to experience an overall bill impact of less than 10%," Genesis said.
Meridian Energy said it was not currently changing prices, while Mercury said it hadn't decided on 2027 prices.
"We will let customers know in advance of any changes," Mercury Chief Customer Officer Suraiya Phillimore-Smith said.
Why the rise?
Contact says lines charges have increased "significantly" in recent years.
Lines charges are what power companies pay to transport electricity to homes and businesses. Unlike user-based charges, they remain the same regardless of how much power a household uses and account for around a third of the average power bill.
"That is putting pressure on prices and is reflected in the prices consumers are seeing," Contact said.
"We have held the electricity part of the power bill just below 3%, well below inflation. We are absorbing part of the increased lines charges coming through too."
The Energy Collective, which operates Electric Kiwi, anticipated increased line charges in April next year, saying it would try to absorb costs where it can – "but that won't always be possible".
"The timing isn't ideal, with these increases coming just as households head into winter," a spokesperson said.
"Our priority is to keep electricity as affordable as possible for our customers."
Wholesale energy prices rose to over $280/MWh in late August 2025 before falling again. In April 2026, lines charges rose by a weighted 7.8%.
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In an August report, the Electricity Authority found power bills increased 6.8% for households and small businesses in the first half of 2026. Higher lines charges drove 54% of this year’s rise, while higher energy costs accounted for 44.6% of the average increase.
Powerswitch manager Paul Fuge said as fixed charges rise, consumers will have less ability to cut their bills by reducing consumption.
"This will be particularly difficult for households already under financial pressure," he said.
He said the impact of the low fixed charge phase-out will depend on where you live, which lines company serves you, and how your retailer structures pricing.
"Two households with similar electricity use in the same street could see quite different outcomes depending on their retailer," he said.
"We’re particularly concerned about low-income and low-use households, including some older people and people living alone, who may face higher fixed costs without enough savings from lower usage rates to offset them.
"Although higher fixed charges should theoretically be offset by lower variable rates, some households will still pay more."
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