It's the biggest shake-up of the electricity market in 20 years, claims the Government. Nonsense. It's nothing of the sort.
It's a cruel joke on electricity users. It's a massive fail by a normally capable minister. And it's a big win for power companies.
It's cruel becauseit's designed to get our hopes up. We're supposed to think that the changes announced this week will bring down our monthly power bills. Fat chance. Very, very few Kiwis will pay less, most likely. For possibly the majority of us, the bills are going to go up.
Frustratingly, the Government has decided to scrap low-cost power plans. At the moment, if your house uses less than 8000 kilowatt-hours of power a year – which is most of us – you qualify to pay lower fixed charges. The Government currently forces power retailers to offer you this. The point of it is to encourage you to use less electricity. So maybe you insulate your house. Or you install a gas heater. Or you install a solar panel on the roof. Or you double glaze your windows. Whatever.
It's hard to know how many Kiwis are actually signed up for this kind of power plan, but we know that 60 per cent of households qualify to be on it. So it's possible that as many as 60 per cent of households are going to start paying higher bills as this deal is scrapped over the next five years.
As for the rest of the so-called reforms, they're nothing more than tinkering. The prompt payment discount is gone. This is the discount you get for paying your bill on time. The Government says it was never a discount anyway. It was just the real price of your bill. And the discount-less, higher price really included a penalty for paying late. The Government is probably right. But this reform isn't going to change that. Power companies will probably still offer a lower price for paying your bill on time and a higher price for paying it late, they just won't use the word "discount". How's that going to change the reality? Families who can't pay their bills on time today, will still not be able to pay their bills on time in the future, and they'll still be stung with the higher price.
The win-backs are gone too. At the moment you can negotiate a better price out of your power company. You can go to a competitor, get a quote for a better deal, go back to your power retailer and ask them to match it. Now, that's gone. Your power company will not be allowed to match it. It's supposed to help smaller retailers win customers. But how does that help you get a better deal? It doesn't. It just means more life admin for you as you try to figure out how to use your online banking to pay a new power company.
Power firms have been very quiet about the reforms. Photo / NZME
And then there's climate change. It's a strange situation to have a government compare climate change to the nuclear crisis, then incentivise us to use more electricity. That's what's about to happen. If you don't qualify for a lower electricity price by installing a solar panel, why would you bother investing in the solar panel? You won't. You'll just keep using electricity at the high rate you're using it right now. Meanwhile, Huntly burns coal to power your house.
It's notable that the power companies have been very quiet about the reforms. You'd think the biggest reform in 20 years would prompt some outcry. But there has been nothing. They've all been very accommodating.
Funny that. Maybe it's because they wanted the low tariff prices scrapped. And now they've got it. And we'll pay them more for power.
It seems like Energy Minister Megan Woods has had rings run around her by the power companies. But, she's one of the smartest cabinet ministers, so it'd be surprising if she didn't realise what was happening.
But then, maybe she was simply happy with the arrangement. Woods got to announce she'll bring down power prices, and retailers got permission to put them up.
