Auckland (The NZ Today)
Thousands of New Zealand households could see noticeable changes to their power bills from April next year as the long-running low-user electricity pricing scheme comes to an end.
The final phase-out means electricity lines companies will no longer be required to keep fixed daily charges at the current low-user cap of $1.80 a day.
Consumer NZ says some households could face much steeper fixed charges, with certain plans potentially rising to around $4.70 a day depending on where people live and how their lines company restructures pricing.
Head of Powerswitch Paul Fuge told RNZ the change would create clear winners and losers.
Consumer NZ believes around 40 percent of households could end up paying more, with lower-income households, smaller households and many elderly customers among those most exposed.
That is because low-user plans have traditionally benefited homes using less electricity each year.
From April 1, however, lines companies will have far more flexibility over how they structure fixed and variable charges.
For someone currently paying the $1.80 daily fixed charge, Fuge said an average increase could be around 90 cents a day, or roughly $335 a year.
The exact impact will vary widely.
MBIE has previously estimated that about 85 percent of households could see a change of no more than about $9 a month either way, but some very low-use households could face much larger increases.
Consumer NZ says the problem is that there is no single national approach.
Different lines companies could move at different speeds, meaning households in one region may face a sharp increase immediately while others see a more gradual change.
The Electricity Authority has also raised concerns.
Its chair, John Harbord, has written to lines companies warning that some customers could face unusually large increases if changes are not managed carefully.
Electricity Authority chief executive Sarah Gillies said lines companies should consider the impact on vulnerable low-use households before setting new prices.
The original low-user scheme was introduced in 2004 to help people using relatively little electricity, but critics have long argued it was a blunt tool.
Some low-income families use more power because they live in larger households or less efficient homes, while wealthier households can also qualify as low users because they live in warmer homes or have efficient appliances.
The changes come after electricity prices have already risen sharply in recent years, adding further pressure for households already struggling with living costs.
A hardship credit scheme remains available through electricity retailers for eligible customers and has been extended through to 2032.
The new pricing regime will take effect from April 1, 2027.
Source: RNZ; Consumer NZ; Electricity Authority; MBIE.
