Power prices fell despite demand surging during lockdown

The average household power bill has fallen by $140 a year since 2014, the latest data from the Ministry of Business, Innovation and Employment shows.
The average annual household bill was about $2118 in 2020 and the average price per kilowatt hour was $0.29. A driver of the lower prices was the lower unit cost of lines charges as a result of changes made by the Commerce Commission last year.

The Electricity Retailers' Association chief executive Cameron Burrows said power use increased by 8 per cent during March and June last year compared to the previous year as Kiwis stayed home during Covid-19 lockdowns.

This went counter to a long-running trend of falling residential power use, in part as homes become more energy efficient, Burrows said.


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Last year, although demand rose as Kiwis worked, studied and operated their businesses from their homes, they were still paying less than previous years.

He said the falling prices were driven by the price per unit of power dropping, both in terms of the energy cost and lines charges, and because of compulsory insulation reducing demand for heating.

Lines charges, both transmission and distribution make up approximately 38 per cent of the average customer electricity bill, according to the Commerce Commission.

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The average household power bill has fallen by $140 since 2014.

Burrows said heat pumps becoming more energy efficient had also affected power bills.

Burrows said disconnections for non-payment of power bills fell 40 per cent last year compared to 2019.

He said low-cost and renewable electricity placed New Zealand well to transition to a net-zero emission economy.

Our power prices are the sixth cheapest in the developed world, which encourages the switch to low carbon options like electric vehicles and heat pumps.

Prompt payment discounts were criticised in a 2019 report from the Government appointed Electricity Price Review, which recommended they should be banned. It also recommended only reasonable late payment fees should be allowed.

The price review panel also found that energy retailers could be earning extra revenue of $39 million because customers were on the wrong plan.

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