Editorial: Power bill hikes straining budgets

Most consumers expect prices for goods and services to rise over time.

However, the cost of power seems to be increasing at a rate that's placing significant pressure on family budgets.

The latest power price survey from the Ministry of Economic Development shows some households in the Western Bay are having to pay 14 per cent more for their power than the same time last year.

In Tauranga, Just Energy customers were the hardest hit - they were found to be paying 14 per cent more for their power and an extra 11 per cent for line charges.

For an average household using 8000kWh that translated to having to fork out $261 more for power and $75 for the line charge, which made an annual power bill more than $330 more expensive than the same time last year.

In terms of price per unit of power per hour, Trustpower was the most expensive power retailer.

The company charged customers 31.24c/kWh. The next dearest was Contact Energy and Empower which charged 29.97c/kWh.

In response, Trust Power community relations manager Graeme Purches said very few of its customers would be paying the top rate and those who were would have lost privileges for not paying on the due date.

Mr Purches said most of the power increase was due to line and transmission charges which made up about 40 per cent of the power bill while 35-40 per cent covered wholesale price of electricity.

About 22 per cent covered TrustPower's rental costs and profits.

According to Tauranga Budgetary Advisory Service manager Marjorie Iliffe, the rising cost of power is putting the most strain on family budgets. Many clients were faced with disconnection notices of huge power bills and were asking for assistance to get the power switched back on.

While many families will be able to adjust their budgets to cover the increase in power charges, others already struggling with the cost of living and people on fixed incomes will be finding it tough.

The Western Bay is not the only region facing big hikes in power prices. A report by Consumer NZ last year said that since 2003, average power prices for homes had risen by almost 7 per cent a year.

Between 1982 and 1992, the average increase was only 0.6 per cent a year.

In the short term there is one thing power consumers can do to save on their monthly power bill - shop around. There are a number of websites that allow people to find the cheapest plan and company for their power needs.

If enough consumers show a willingness to swap companies it may encourage more competition and help turn the tide.