Consumer NZ: Estimated 40,000 have gone without electricity - and paying the most for what they do use

New Consumer NZ research found households using pre-paid electricity could be paying up to 17% more than those on monthly plans.

Some of New Zealand’s most cash-strapped households are struggling through winter with no power – and are paying the most for the electricity they do use, a new study has found.

New research from Consumer NZ has found most pre-pay customers could be paying about 15% more for power.

Pre-pay customers are often unable to sign up for monthly electricity plans because of poor credit ratings and tend to be New Zealand’s most vulnerable electricity consumers.

Consumer estimates that around 50 pre-pay households are going without power every night based on statistics shared with them last year.

And the new research found that pre-pay customers in Wellington could be paying 15% more and those in Auckland around 11% more than those who pay monthly.

Christchurch residents were even worse off and could be paying 17% more to keep the power on.

On average, there were 15 cheapesaid households on pre-pay were excluded from the cost savings offered by other plans.NZ campaigns manager Jessica Walker said.

Walkersaid households on prepay were excluded from the cost savings offered by other plans.

“It seems remarkably unfair that people already struggling to keep their lights on are forced to pay more for their power.

“Pre-pay customers pose no financial risk to their retailer.”

New Zealanders on prepay are automatically disconnected from their power supply every time they run out of credit.

There are no official records of how many households on prepay are going without power – with electricity retailers not obliged to report this.

Walker said it was unclear how many people were surviving the winter with no access to heat, light, hot water, or the ability to cook in their homes.

And with the cost-of-living crisis deepening, there is a risk of more households moving to pre-pay.

Consumer’s 2023 power company satisfaction survey found 6% of households had switched to pre-pay because they had trouble paying their power bill.

The same survey highlighted 2% of households reported their power supply was cut off in the past 12 months because they could not pay their bill.

“Our survey findings equate to around 40,000 households going without power at some point, because they could not afford it,” said Walker.

“We are concerned that an increasing number of households will be unable to keep the lights on. We believe more investigation is needed so that regulators and policymakers have a clearer understanding of what’s going on.

“Above all else, we want to know how many New Zealanders are going without power in their household.

“No one should be shivering in the dark this winter, or ever, because they can’t afford to pay their power bill.”

Recent Consumer research found around one in 10 households had an electricity retailer refuse to take them on as a customer because of previously missed power payments.