Kerikeri residents' power bills are around 40 per cent higher than they are for a similar household in Auckland. Photo / File
Soaring power bills are hitting Northlanders hard in the pocket among revelations that electricity prices in parts of Northland are significantly higher than they are in Auckland.
The price hikes also come at a time when the country’s four biggest power companies are raking in billions in profits for their shareholders, prompting calls for Government intervention.
Nikki Hodgetts, from Whangārei, was struggling to pay the power bills for her family of five, which includes her husband, 78-year-old mum and two children.
Their average bill was between $380 and $450 per month, increasing to $480 in winter so her mum could use the heater and an electric blanket.
“We moved from Auckland six years ago and noticed the huge increase straight away,” Hodgetts said.
“In summer our bill would be no less than $380 a month.
“In the winter we had no choice but to take that from other bills, like food or dog or car registration funds.
“Or we all slept in the lounge on occasion for fireplace warmth as I won’t let anyone but mum use a heater.”
Hodgetts had gas hot water installed two months ago and her last bill decreased to $250.
Kerikeri residents pay around 40 per cent more for their power than similar households in Auckland, according to National’s Energy and Resources spokesman Stuart Smith, who raised the issue in Parliament recently.
The price of a unit of electricity in Whangārei is 10 per cent higher than in Auckland, according to Ministry for Business, Innovation and Employment data.
Smith asked if Minister of Energy and Resources Megan Woods saw that “as being unfair”.
Woods noted that electricity lines charges make up about 40 per cent of what a consumer pays on a typical power bill.
“Smaller towns and communities often have lower population density, and are often further away from power stations and therefore require more infrastructure in terms of lines,” she said.
“They often have fewer commercial and industrial electricity users, meaning there are fewer people and businesses over which to spread the cost of that infrastructure.”
This doesn’t surprise former Kerikeri resident Nikki Simmons, who moved home to the UK in February.
Simmons said: “Power is still cheaper here than it was in Kerikeri even before we left.
“We are only paying just under £100 [$185] a month for gas central heating and power.”
Comparatively, Simmons’ last bill in Kerikeri was $213.
Papa Hone, who runs One Whānau at a Time, a charity distributing kai, clothing, and furniture to people in need in the Far North, said people were finding it tough.
“Everyone is struggling right now with the cost of everything and power on top of that.
“I know people using Globug and prepay power services and they literally watch the power; it goes so fast now they can’t keep up.
“The ones feeling the pinch right now are families, the people that we deal with they just can’t keep up anymore.”
Financial mentor Christine, from Northern Community Family Service, said many of her clients are “just managing to make their payments”.
“Sometimes they’re having to cut back on food to pay their power, other times they’re shopping around getting the best deals they can.
“A couple of people have said ‘Our power bill is the same as it is in the middle of winter, what’s going on?’
“People are chopping and changing power companies to suit their needs.”
Mid North Grey Power secretary Bruce Crowther said elderly residents are also “definitely struggling”.
“Especially those living by themselves.
“If older people have retired without considerable savings it’s very hard to make ends meet.
“Food prices, energy bills, transport ... they’re all issues in Northland.
“You can survive if there are no extras, but if you’re still paying a mortgage or worse still paying rent, it’s really, really hard for people in that situation.
“It’s not just power bills, you’ve got to consider the liquid fuel you’re using on your motor vehicle.
“The lag between inflation and adjustment and payment, for people on benefits and superannuation, is way too long.”
Consumer NZ warned more price hikes were on the way.
From November, Contact Energy customers saw their electricity bills increase by about 8 per cent, and Genesis is planning to increase its electricity prices for residential customers in January.
The price hikes come as the combined profits of Genesis, Meridian and Mercury totalled $1.35 billion to the end of June - more than double their combined profits from the previous year, Consumer spokeswoman Gemma Rasmussen said.
“Some of the larger retailers are continuing to make lofty profits and are increasing their power pricing to customers at a time when many New Zealanders are struggling financially,” Rasmussen said.
Rasmussen encouraged residents to use Consumer’s data comparison site Powerswitch to compare plans and check if they can get a better deal.
The potential savings people can make from switching electricity providers is an average of $385 a year, she said.
“We know from Powerswitch data that some of the lowest prices are being offered by the smaller retailers.
“There’s room for larger retailers, especially the well-established players making large profits, to sharpen their pricing.”
A new report by the New Zealand Council of Trade Unions (NZCTU), 350 Aotearoa and First Union shows since the partial privatisation of electricity companies, the four big generator retailers have delivered billions in excess dividends to shareholders.
“The Government has recently acted on the banking sector and on petrol companies to ensure that they are delivering better outcomes for New Zealanders,” NZCTU economist Craig Renney said.
“This report demonstrates that there is a pressing need to do this for the electricity sector as well.”
Green Party energy and resources spokeswoman Julie Anne Genter agreed the four big electricity companies should be required to reinvest “massive profits” into cutting household bills and climate pollution.
“Climate action and support for energy-poor households should be a core design feature of our electricity market,” Genter said.
“Access to clean, affordable energy is an essential component of dignified life, yet successive governments have designed an electricity market that puts shareholder profit ahead of public interest.”
Far North lines company Top Energy said the population and infrastructure “do have a bearing on electricity prices”.
“However, Top Energy’s lines charges have actually decreased by 15 per cent in 2020 and a further 9 per cent decrease this year,” a spokesperson said.
“The real reason power prices are going up is an increase in wholesale power prices.
“With carbon tax, the average wholesale price has more than doubled. This is the reason overall.”
The Electricity Authority, an independent Crown entity responsible for regulating the electricity market, said it “is intent on ensuring the market is working in the best interests of consumers”.
While it regulates the industry by promoting competition and reliable supply, it does not set electricity prices, acting chief executive Sarah Gillies said.
“We have recently undertaken a review into the wholesale market to promote competition. We believe the entry or threat of entry by competitors is one of the most powerful ways to keep a check on prices.
“But consumers can also play their part by shopping around for a better deal. The electricity market gives consumers choice, with a range of retailers and brands to choose from with different products and services.”
Genesis Energy said its residential electricity price increases have been “below inflation for a number of years”.
“The proportion spent on electricity out of total average household income has decreased over the 10 years to 2019, currently representing around 1.9 pe rcent of average household income,” a spokesperson said.
“If our customers are struggling financially, we encourage them to call our Customer Care team.”
Meridian Energy and Mercury could not be reached for comment and Contact Energy did not respond before deadline.
Christine advised residents to put aside money for the power bill each week and to use Smooth Pay, which involves paying regular amounts more frequently, and building up credit over summer, which covers higher bills in winter.
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