Lowest power price increase since 2001

July 16th, 2014 at 9:00 am by David Farrar

Simon Bridges announced:

New power price data released today shows the Government’s 2010 electricity reforms are making a real difference for consumers, says Energy and Resources Minister Simon Bridges.

“The sales data released by the Ministry of Business, Innovation and Employment for the year ending March 2014, shows the lowest annual price increase since 2001 at 2.3 per cent,” Mr Bridges says.

“Discounts and other benefits from retailers are becoming the new norm in an increasingly competitive electricity market and the new data captures what consumers have actually paid for their power, rather than the advertised price.”

In other words, competition helps keep prices from increasing greatly.

For the June quarter, there has been an increase of 2.3 per cent.  This was driven by a 6.7 per cent increase in lines charges — the component regulated by the Commerce Commission — as retailers passed on the significant investment costs associated with upgrading local networks. 

The energy component — the part subject to competition — decreased by 0.7 per cent. 

This is what makes Labour’s policy so bizarre. Rather than focus on better regulating the parts of the electricity sector which are monopolies, their policy seeks to destroy competition and the market among generators.

Latest figures released by the Electricity Authority show that consumers can save, on average, $155 per year by switching power retailers.

Yep. I’ve saved heaps by swapping.

Tags:

17 Responses to “Lowest power price increase since 2001”

  1. kowtow (8,733 comments) says:

    Competition good,government interference bad.

    We have coal to last forever.

    We should be using it to generate cheap electricity and to heat our homes.

    Using coal should reduce power prices not slow down the inevitable increases.

    Vote: Thumb up 8 Thumb down 2 You need to be logged in to vote
  2. wreck1080 (3,956 comments) says:

    The power market is clearly not working. But, the greens will make it worse.

    Residential power prices should be falling.

    Trustpower are investing in Aussie because of this….

    Tauranga-based Trustpower is expanding into the Australian market buying five New South Wales state-owned renewable energy generators for $A72.2 million.

    Trustpower is buying into Australia because of commercial and political issues in the New Zealand market.

    The supply-demand balance has gone the wrong way, says Trustpower community relations manager Graeme Purches. Apart from peak hour there is more supply than demand.

    http://www.sunlive.co.nz/news/75625-trustpower-buys-oz-power.html

    Vote: Thumb up 3 Thumb down 2 You need to be logged in to vote
  3. Lance (2,704 comments) says:

    These same drongos are going to demand low prices from big power generators and ludicrously high subsidies for micro-generators (solar arrays on homes).

    Only one place the difference to going to come from, the tax payer, one way or another.

    Vote: Thumb up 5 Thumb down 0 You need to be logged in to vote
  4. cas (40 comments) says:

    I’ve saved heaps by ringing my existing provider, telling them what a competitor was offering and they agreed not only to match it but do better. And they offered a bonus as well!!

    Vote: Thumb up 4 Thumb down 0 You need to be logged in to vote
  5. peterwn (3,298 comments) says:

    But you only get the lowest power prices if you accept electronic bills, pay by direct debit (or perhaps at least by internet banking), pay on time and (presumably) have a reasonable credit rating. And for Mercury customers have a few Mighty River shares.

    One would hope in due course that pre-pay options can offer the cheapest power – the development of smart metering should make this possible.

    Vote: Thumb up 2 Thumb down 0 You need to be logged in to vote
  6. oldpark (373 comments) says:

    Would love to know the stats on the amount of money Labour gouged from power users in the period 2001-2007 some people are saying at least seven billion dollars.Labours sullen Cullen called it a surplus.Now the same party have emerged from the woodwork attacking the Nats over power increases.Go figure.

    Vote: Thumb up 8 Thumb down 0 You need to be logged in to vote
  7. Tarquin North (352 comments) says:

    Another inconvenient truth for Labour and the Greens to swallow, oh dear how sad never mind.

    Vote: Thumb up 5 Thumb down 0 You need to be logged in to vote
  8. cas (40 comments) says:

    We get paper bills and pay at NZ Post

    Vote: Thumb up 1 Thumb down 0 You need to be logged in to vote
  9. YesWeDid (1,050 comments) says:

    With electricity demand falling or static and supply increasing then in a truly competitive market prices would be falling not increasing.

    Vote: Thumb up 2 Thumb down 3 You need to be logged in to vote
  10. Lance (2,704 comments) says:

    @yeswedid
    Yes it’s all that simple isn’t it?

    Oh that’s right, people become pissed off if the power isn’t there when the light switch is turned on. Pesky infrastructure and spinning reserve.

    Vote: Thumb up 3 Thumb down 1 You need to be logged in to vote
  11. RightNow (6,995 comments) says:

    YesWeDid (1,029 comments) says:
    July 16th, 2014 at 9:42 am
    With electricity demand falling or static and supply increasing then in a truly competitive market prices would be falling not increasing.

    Perhaps you didn’t read this bit:

    The energy component — the part subject to competition — decreased by 0.7 per cent.

    Vote: Thumb up 3 Thumb down 0 You need to be logged in to vote
  12. slijmbal (1,236 comments) says:

    @wreck

    “The supply-demand balance has gone the wrong way, says Trustpower community relations manager Graeme Purches. Apart from peak hour there is more supply than demand.”

    is such a nonsensical statement – of course there will be more supply than demand outside of peaks as we need sufficient capacity to cope with peaks.

    The fact that the cost of energy – that bit that is competitive – dropped recently and the monopoly element increased in price is a good indicator that the partial competition we have in NZ works in those areas it is applied.

    But as you intimated the vast bulk of the article points out how Labour-Greens interfered in the market and screwed it up

    Not impressed that Trustpower are investing in windfarms as the vast majority are economical money sinks and as economically viable as burning 20$ notes to keep oneself warm.

    Vote: Thumb up 4 Thumb down 0 You need to be logged in to vote
  13. Lance (2,704 comments) says:

    @slijmbal

    Burning $20 to stay warm is fun, if it’s other peoples money.

    Vote: Thumb up 4 Thumb down 0 You need to be logged in to vote
  14. gump (1,661 comments) says:

    @DPF

    “In other words, competition helps keep prices from increasing greatly.”

    ———————-

    I thought that the purpose of introducing competition was to reduce prices?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  15. brucehoult (200 comments) says:

    So I’ve been lazily with the same power company (PowerShop) for more than five years. Who should I be changing to now?

    I used 9866 units in the last 12 months, 40% or so between 11 PM and 7 AM. My total cost the last 12 months was $2113.74 (including lines charges and GST etc), i.e. average cost per unit 21.42c.

    How much can I save?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  16. Scott1 (575 comments) says:

    Lowest increase in years,
    That is like getting 50% on a test in 2012, 45% last year and 43% this year and calling it a success. If it happened in education under labour you’d fall of your chair laughing.

    Still maybe the -0.7 is relevant. Has the energy or retail energy only component been separated out in previous data?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  17. Rex Widerstrom (5,354 comments) says:

    For the June quarter, there has been an increase of 2.3 per cent. This was driven by a 6.7 per cent increase in lines charges — the component regulated by the Commerce Commission — as retailers passed on the significant investment costs associated with upgrading local networks.

    The energy component — the part subject to competition — decreased by 0.7 per cent.

    Lines charges are an absolute rort on the taxpayer. Not only are they not subject to competition, but electricity companies are able to spend whatever they like on capital, at whatever cost, and pass it on to the taxpayer. It’s as if the taxi companies owned the road and decided, without consulting you, to make them all seven lanes both ways – then added it to your fare.

    The Commerce Commission seems unwilling or unable to rein them in, while the consumer, no matter how much they’re willing to put on yet another layer of clothing, can do nothing to reduce a large proportion of their bill. And it’s worse for owners of holiday homes, who by now have paid for the poles and wire to their bach several times over but keep on getting a bill for… what, exactly? The transmission company not ripping the poles out?

    I realise Australia is different (electricity is a state matter, but has a national regulator, for one thing) but this article, “Power Corrupts” from The Monthly is well worth a read for the parallels with NZ and indeed any country where this dual billing is allowed to occur.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote