Electricity users with low consumption plans said their daily fixed costs doubled

The decision to phase out electricity tariffs for low users was made in September, but the new pricing shocked some consumers.

123rf

The decision to phase out electricity tariffs for low users was made in September, but the new pricing shocked some consumers.

Power companies have started telling customers that the fixed daily charge on their power bills is doubling from 34.5 cents a day to 69c from April.

The country’s largest power company, Meridian, and Nova Energy are among those that have started sending new tariffs to customers.

The doubling of the daily rate stems from a decision by Energy Minister Megan Woods in September to phase out the requirement for power companies to offer low rates to users, over four years from April.

Reduced user tariffs were originally introduced in 2004 as a way to encourage people to save energy.

READ MORE:
* Disruption in electricity charges could disadvantage ‘vulnerable households’, says Consumer NZ
* Electricity tariffs for small users will be phased out over 5 years
* Prompt payment discounts are still there despite the government’s desire to see them disappear

But the government, with the enthusiastic support of the electricity companies, concluded that this resulted in an unfair price structure for large families who may have been living in poorly insulated houses.

Utilities will be able to increase daily charges by an additional CA34.5 per day, including GST next year, and again in 2024 and 2025, raising hundreds of millions of dollars a year additional fixed costs.

Woods expected power companies to use the extra revenue to apply an equivalent reduction in charges paid by households that use more electricity, meaning consumers as a whole would be neither better nor worse off. on average as a result of the change despite there being winners. and losers.

However, the government did not ask the electricity companies to guarantee that the tariff changes would cancel each other out.

The price of gas is expected to rise much faster than inflation over the next four years, partly due to a regulatory decision.

123RF

The price of gas is expected to rise much faster than inflation over the next four years, partly due to a regulatory decision.

A Meridian price change notice seen by Thing showed that the company was doubling that customer’s daily charges while increasing Meridian’s energy charges per kilowatt by just over 1%.

Meridian spokeswoman Rheilli Uluilelata said it had “implemented a slight increase in energy charging to reflect increased electricity supply costs”.

But Uluilata said Meridian expected the overall impact of the government’s decision price changes on low fixed charge tariffs to be “broadly neutral”.

Earlier this month, it emerged that consumers would separately face a 19.3% increase in the price of piped natural gas that would be phased in over four years from October, assuming a proposed decision issued by the Commerce Commission be confirmed.

This price increase is solely due to a proposed increase in gas distribution costs and does not include price increases that may result from the increase in the price of gas itself.

Comments are closed.