Compared to last November, power prices are up 11 percent. Photo: RNZ / Nate McKinnon
Power prices have gone up about 11 percent nationally in the first half of this year, new data shows.
The Ministry of Business, Innovation and Employment has released its latest survey of domestic electricity prices, the first since April's round of bill increases.
In April, lines companies were allowed to increase what they charged - which was expected to add about $10 a month to most power bills - the next step in the phase-out of the low user tariff took effect - increasing bills for some households - and some retailers also adjusted their prices.
Powerswitch general manager Paul Fuge said, compared to last November, power prices were up 11 percent. The most expensive area of the country -Kerikeri - saw a 6.8 percent increase.
"Electricity prices have jumped sharply since 1 April, with increases well above the current inflation rate," he said. "In real terms, electricity prices were relatively flat over the past five years, due to regulated lines charges - set by the Commerce Commission - falling during that period, which offset the increases in the actual energy component of bills that rose faster than inflation.
"However, from April this year, the new lines regulatory cycle has kicked in, with lines charges now adding about $10-25 a month to household bills, depending on location.
"Similar infrastructure cost increases are hitting gas users. At the same time, tighter energy supply is driving up the cost of both electricity and gas themselves."
He said prices were unlikely to rise as much next year, but there could still be further increases.
"Electricity prices in New Zealand have got very high and are sort of detached from the cost of producing it," he said. "That's really hurting consumers and our businesses, and it's a threat to the economy as well, when businesses are struggling to stay viable."
He said retailers told him the forward price for electricity for the next three years was close to double what it was four years ago.
While most households would be less exposed to variation in the wholesale market, it would eventually flow through.
"It is of concern that it does seem to be ongoing," Fuge said. "Occasionally, you get dry years and the price spikes, but this has been a really extended period and it's gone beyond a drought."
He said households reported struggling with their bills, even before the April increases.
Consumer NZ's survey found 20 percent struggled to pay their power bill in the past year, 11 percent had cut back on heating due to cost and 6 percent had been disconnected.
"Our advice is that anyone struggling should contact their power provider and refer to the now mandatory Consumer Care Obligations, which set out how companies must support customers in difficulty," Fuge said. "Looking into time-of-use plans, and being strategic about when and how you use energy can save you money.
"We have recently been working with EECA on winter savings tips that can help people save money on their power bills this winter."
The Electricity Retailers Association said electricity costs had been flat or declining in real terms for a decade.
"In the past year, retailers have begun passing on cost increases, with the largest contributor being regulated lines and transmission charges, set by the Commerce Commission, to fund infrastructure upgrades that will meet increasing electricity demand over the coming decades.
"ERANZ members recognise that this is a challenging time for many households, and the sector is highly focused on delivering the best outcomes and affordable electricity to New Zealand consumers.
"Anyone struggling to pay their electricity bill is encouraged to contact their retailer as soon as possible. Our members have strong support measures in place and a variety of ways to help."
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