Consumer NZ says price spikes one of the risks of spot price power plans

There was a 12-month high in electricity demand during bitterly cold weeks in June.

An Auckland resident was shocked to get a $150 bill for a week's power - double the previous bill - during a cold snap last week.

The resident is on a weekly spot price plan, and consumer advocates say the occasional big bill is one the risks of such a plan.

But the power company, Flick Electric Co, said the resident's costly power bill from last week would even out over the year.

The company provides wholesale priced electricity to customers on spot pricing terms where bills vary week to week depending on supply and demand.

The resident had been signed to Flick for five years but had never experienced such a spike in their bill.

Other customers complained on Twitter about last week's price spikes. One tweeted that they were a fan of the company but were not happy with its response to the increase.

A Flick spokesperson said that while power prices were higher than average last week, most customers' bills were not double the usual.

They said the bigger bill was the result of an all-time high for 12-month electricity demand in June.

The spokesperson said Flick had saved their customers $7.9m since they launched and customers who had been with them for two or more years had saved an average of $597.

"While it's true that an aspect of being on a spot price plan is that occasionally customers will have negative savings, which is reflective of market conditions, these are relatively uncommon."

There had been 19 weeks in which customers did not make a saving since July 2015.

Consumer NZ chief executive Suzanne Chetwin said several events last week would have increased Flick users' bills.

Low wind generation meant cheaper renewable energy went amiss and colder temperatures in Northland resulted in increased demand, she said.

Along with this, a power station unexpectedly shut down for maintenance which reduced generation capacity.

"These events would result in higher spot prices in the short term and is indicative of the risks a consumer needs to be aware of when signing up to a spot price product.

"This would apply to all retailers selling spot price products, not just Flick."

Most electrical retailers charge a fixed monthly rate to consumers despite the price of the electricity generated that month fluctuating.

This means consumers may pay a retailer less than the wholesale electricity cost one month, but pay more the next. In this case, the retailer absorbs the extra price, said Chetwin.

However, Flick charges consumers weekly at the wholesale cost where they may pay cheaper rates one week but bills can also be much higher than other retailers in some weeks.

The Flick spokesperson said the impact of price changes is smoothed over a longer time period.

The spokesperson said the company "acknowledge and care about those customers for whom a high bill is simply not manageable".

It encouraged customers to contact the company if they had trouble paying bills and they would work out an arrangement.