4 Apr 2014

PM foresees minimal power price rises

3:20 pm on 4 April 2014

Prime Minister John Key says he expects power prices rises will be kept to a minimum once major grid upgrades are complete.

Simon Bridges: ad hoc discounting makes a significant saving.

Simon Bridges: ad hoc discounting makes a significant saving. Photo: NZ GOVERNMENT

The Labour Party says the Government's Power Switch campaign has made very little difference to people's power bills, and prices are continuing to go up.

Mr Key says overall power prices have gone up a little over 20 percent in the five years National has been in government.

"That 20-odd percent is largely made up from increases that have to be passed on because of the reinforcing and upgrading of the network," he says. "Now if in the end we've completed that task, for the most part, then that should at least see power price increases at a minimum."

Mr Key says the best thing the Government can do for the public is make sure the power market is competitive.

Energy Minister Simon Bridges also says the advice he has suggests that power prices will not increase by much in coming years and customers can still make significant savings.

A report commissioned by the Ministry of Business, Innovation and Employment says the scheme has increased the number of people changing their provider but has failed to promote competition or bring retail electricity prices down.

However, Mr Bridges says there are some savings the report doesn't measure.

"It's not capturing, for example, probably the biggest phenomenon of the last three or four years, which is the ad hoc discounting that companies are doing. Contact's a very good example of it - 22 percent discount for paying online and on time. That makes a very significant saving."

Labour energy spokesperson David Shearer says for some people who switched providers there has been some impact but the idea of the campaign was to bring prices down and overall the scheme "has made very, very little difference - in fact people's prices still continue to go up".

However, Mr Shearer told Morning Report Labour wouldn't scrap the scheme now that it exists.

The $15 million scheme was used to create the What's My Number website and develop the Consumer Power Switch site.

Despite the report's findings, Consumer New Zealand says electricity companies are doing deals to keep customers from switching, by offering them incentives to stay.

Chief executive Sue Chetwin says people should continue to shop around to get better deals. "It is quite competitive out there," she says, "so if you do have a word with your retailer, if you think you're paying too much, you might find you can do a deal."

For more detail on this story:

Full report to the ministry

What's My Number website