Power prices falling as switching climbs

Power pylons near Huntly. Photo / Amos Chapple

New Zealand households saved more than $67 million last year switching electricity suppliers and enjoyed the first fall in power prices in 15 years.

Figures released by the Electricity Authority show last year was a record year for switching as per unit cost of power fell. Nearly 418,000 consumers changed electricity suppliers during the year. Of these, 384,841 were residential consumers.

"The average amount New Zealanders could save in a year was $175 if they switched to the cheapest deal in their area. If all Kiwis switched retailers in 2015 they could have saved a collective $307 million."

Wellington was the region with the highest switching rate. In total, 24 per cent of Wellingtonians switched retailers last year. The region with the highest increase in switching was the West Coast, which saw a 70 per cent increase in switching activity compared to 2014.

For the year ended March 2016, the average residential cost per unit of electricity was 1.7 per cent lower than in the previous year. This is the first time in 15 years that the annual average cost of electricity had fallen, the authority said.

The estimated average saving available to consumers who switched was $175 in 2015.

There were significant differences in the savings available across the country, with some regions having estimated average savings exceeding $200.

The number of solar installations more than doubled in the year.

Graphic / NZ Herald

By the end of the year there were a total of 8281 total connections by the end of the year, mostly in Auckland. This is 3600 more installations than at the end of 2014.

The authority said a " notable trend " was the increased number of residential customers on pre-pay electricity contracts. Pre-pay connections increased from 30,804 in 2014 to 43,560 last year.

This, coupled with more retailers in the market and more choice from existing retailers, is helping to create an even more competitive residential electricity market.

There was also big growth in the number of small, independent brands.Across New Zealand there were 31 retail electricity brands available, backed by 20 parent companies.

This compares to 24 brands backed by 15 parent companies as at 31 December 2014.

Electricity Authority chief executive Carl Hansen said the review of the year said there were a large number of engaged consumers.

"This, coupled with more retailers in the market and more choice from existing retailers, is helping to create an even more competitive residential electricity market. All the market competition measures we monitor showed improvements in 2015."

There were 14,563 new residential connections in 2015 with every region except Gisborne experiencing an increase.

Most of the growth was in Auckland, Canterbury, the Bay of Plenty and Waikato, although percentage wise, Nelson was the fastest growing area with an increase of over two per cent for new connections.

Against this trend Gisborne lost 92 connections (0.59 per cent) in 2015.