Consumers switch off as costs soar

Contact Energy said the survey did not provide the complete picture. Photo / Ben Crawford

People are suffering from "energy poverty" and switching off their electricity to save money as new figures reveal power bills have risen an average of $65 in the past year.

The Ministry of Business, Innovation and Employment's quarterly survey of domestic power prices shows residential power prices in all regions have increased in the year to May 15, from $17.19 in Dunedin to $182.36 in Gisborne.

The study, which relied on Electricity Authority data, was based on an average household using 8000kWh a year, which is close to the nationwide average residential consumption.

Gisborne Budget Advisory Service manager Linda Markie said most of the 480 people seen by the organisation last year cited rising power costs as a concern.

"One lady [who came in] the other day, she'd had no power for six weeks and 18 months before that she'd chosen to disconnect her gas which was half of her power bill," she said.

Age Concern chief executive Ann Martin said many older people would simply not use heating this winter to avoid surging power bills.

"When you're on a fixed income and power prices rise, something has to give," she said.

"Some will reduce their power consumption again and again to cope with the higher prices, until they can't cut back any further and they end up living in cold, dark homes. Older people are of the generation which believes in paying their bills in full on time, even if they have to suffer for it," she said.

Ari Sargent, chief executive of power retailer Powershop, said the increases were being driven in large part by lines company charges, but this meant little to households struggling to pay their power bills.

"We're paying record prices at the pump, checkout and now for power. Energy poverty is becoming a real issue in New Zealand and there needs to be a government-driven solution to support those families who can't make ends meet," he said.

Powershop's sharpest increase was 7 per cent on the central North Island's WEL Networks.

Electricity industry expert Geoff Bertram, a senior associate at Victoria University's Institute of Governance and Policy, said power prices were going up when they should be falling.

"What's happening is the cartel that's been pushing prices up for the last decade is still operating. The big companies are essentially able to raise their prices without consequences and consumers simply have to pay or get disconnected," he said.

Contact Energy said the survey did not provide the complete picture.

"We have a range of pricing plans and highly competitive offers in the market along with a range of payment options that help customers meet their energy needs," it said.