4 May 2022

Charities inundated with people struggling to pay power bills

From Checkpoint, 5:25 pm on 4 May 2022

Just over a month since the government scrapped low-use power plans, charities say they are being inundated with people struggling to power their electricity bills.  

It is another sting in the tail for people already struggling with the rising cost of living. 

Ever since the news power prices were going up, Consumer New Zealand saw a spike in phone calls from frustrated customers. 

"I'm fully expecting it to keep climbing to the outer territory," said one person. 

"Absolutely I would say probably $6-7 a week, we've just gotta do what we gotta do," said another.

The 30-cent fixed daily charge will double, adding an extra $110 a year to the average power bill. 

The manager of Consumer NZ's energy price comparison website Powerswitch Paul Fuge said that increase will be significant over the next five years. 

"So that means you're going from 30 cents a day now to $1.80 in five years time, which is an extra $657 - $700 from what you've been used to." 

Fuge said it was not an even playing field with retailers.

"Some retailers are going to the full maximum and increasing 100 percent, some retailers are only increasing by 50 percent, and some aren't increasing... just because they're allowed to phase the low fixed charge out doesn't mean they have to phase it out." 

That is why it has become even more important to shop around for our power. 

Close-up woman standing and holding money coin with wallet empty of money

Photo: 123RF

Elderly people are largely impacted. Central representative for Grey Power Lew Findlay has seen that first hand. 

"Everything is going up for them and their super certainly hasn't gone up anywhere near that, up to $150 on rates a fortnight and your food is going up 6-7 percent and petrol's gone through the roof."

Staring down the colder winter months, older people may put their health at risk whilst facing significantly higher power bills, he said. 

"You get a power bill over $100 it takes a fair whack on your super, they don't turn their heaters on, they'd rather wrap up in the blanket, they'll turn the heaters off, you know, and and go to bed early just so they can save power."

But the issue is even more widespread. 

"There's a lot more people than that, just different family situations people that are coming in with two incomes and more people with a home as well, yeah, normally that wasn't very common, but it's becoming more common," Budget Advisor Fiona Govender said. 

At the Pakuranga and Howick Budgeting Service in Auckland, over the last two years they had seen more and more people asking for help.

While the winter energy payment is helpful, for those that qualify, it barely makes a dent in the huge jump in prices, Govender said. 

Sustainability Trust fair energy manager Phil Squire disagreed with the government's decision. 

He said it favoured retailers and those trying to be more energy conscious or who were struggling financially lose out.

"A lot of it definitely came from retailers and lines companies and we work for low income households and we weren't consulted at all on the change." 

He was calling for retailers to make some changes. 

"Either remove fixed prices altogether, or set a regulated standard fixed charge." 

The key message in the current climate is to do your research and shop around using free services like Powerswitch which tracks pricing plans. 

Energy Minister Megan Woods declined an interview, but in a statement said: “It’s wrong to attribute all the increases in people’s power bills to the gradual phase-out of low fixed daily charges, which at most will go up 30 cents, per day, a tiny fraction of the bill. 

"Higher wholesale prices and lines company charges are also significant components of a person’s energy bill. In fact the low fixed charges are being phased out following the 2019 Electricity Price Review, which found they exacerbated energy hardship for low-income households with high electricity use, and were poorly targeted.

"I note that MBIE‘s quarterly survey of domestic electricity prices, which measures how residential energy prices change over time, shows that over the last 6 quarters prices have fallen (adjusted for inflation) by between 2 percent and 3 percent. 

"Consumers, especially ones that are doing it tough, have a right to know why their bills are going up, and I have certainly made my expectation clear that electricity companies should be transparent about why their costs are changing.”