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Nearly $19 million was paid out in support to New Zealanders struggling with energy bills last year, an average of more than $500 per grant.
That average per grant is the highest since at least 2019 and more than double what the Ministry of Social Development’s (MSD) website says it “generally” pays out. After questions from the Herald about that discrepancy, the agency said it was reviewing its “website content to provide clarity”.
Energy Minister Simon Watts said he was “keenly aware of the cost-of-living pressures” many New Zealanders are experiencing. But the Government’s initiatives to address energy prices were mostly “medium and long-term” solutions, he said.
The data provided to the Herald shows $18,983,095 was paid out in electricity and gas grants by MSD in 2024. With 36,627 grants made, that’s an average of $518 per grant.
While the overall amount granted and number of grants is down from 2023 ($19,385,184 and 39,831 respectively), that year the average grant was $487. The 2024 average is the highest since at least 2019, when the data period begins.
According to the MSD’s website, New Zealanders can get grants for power, gas, water and heating if they can’t pay bills. Whether someone gets a grant depends on how much they earn as well as how much money or assets they have.
“Generally, we can pay up to $200 to help with an outstanding power, gas or water bill [or] reconnecting your electricity, gas or water supply,” the website states.
MSD can also help people get their personal water tanks refilled and delivered, and with the cost of bedding, blankets, curtains or heaters. It pays out the Winter Energy Payment to those on the NZ Super and main benefits needing assistance with heating.
The Herald asked MSD why there was such a big difference between the average grant amount last year and how much the website said could generally be paid out.
George van Ooyen, MSD’s group general manager client service support, said the line on the website was a “guideline and may be exceeded in some situations”.
“We will be reviewing the website content to provide clarity,” van Ooyen said.
Energy prices attracted attention last year. Photo / Bevan Conley
‘Pretty hard to stomach’
Energy costs have been in the spotlight after prices soared last winter amid record-low hydro-lake levels, a lack of wind and sun, and what the Government has described as an inadequate supply of gas. It again raised questions about the market structure and regulation.
Household electricity cost as measured by the Consumers' Price Index was reported to have risen 5.9% year-on-year in September, which Infometrics chief economist Brad Olsen said was “the largest annual increase seen since 2009” once GST changes were excluded.
“For households that are needing to heat a house and keep themselves warm and keep the lights on literally, that’s been getting increasingly expensive,” Olsen said.
He said it could get worse, noting that the electricity futures market showed an increase in wholesale electricity prices of 25% and the Commerce Commission was increasing the limit on revenue Transpower and line companies can get due to inflation, interest rates and higher levels of investment.
Olsen said that investment was “important and does have to be paid for”, but it would be “pretty hard to stomach for households”.
Watts, who became the Energy Minister during last month’s reshuffle, told the Herald he was aware of the cost-of-living issues.
“I am committed to cutting regulatory barriers to encourage investment in energy generation so we can deliver affordable energy prices for New Zealanders,” he said.
The Government responded to last year’s energy crisis by launching a review of the electricity market, including scrutinising the current market structure, design and rules, and whether performance can be improved to ensure the market delivers electricity at the lowest possible cost to consumers.
This was one of the key initiatives Watts pointed to when asked what changes the Government was considering to relieve pressure on consumers and improve competition.
The electricity market review is expected to be completed by the end of June, while the joint taskforce will this month “consult on options to give consumers more control over their energy costs and actively participate in the electricity market”.
“For example, shifting their time of energy use, or selling the electricity generated by rooftop solar or batteries back to the network at peak times. Getting the incentives right to help more consumers make this switch will help reduce peak demand and spot prices, which will flow through into lower prices for Kiwis in the longer term.”
Energy Minister Simon Watts. Photo / Alex Burton
Watts said the Government was also exploring a Consumer Data Right (CDR) for electricity, which “could give customers the right to require data holders (like retailers or metering companies) to share information”.
That would let customers compare electricity plans and “make the best decisions for their households”, Watts said.
“While the impacts of these initiatives will largely be felt in the medium and long term, the Government also funds a range of support measures to help New Zealanders with their energy costs in the shorter term,” Watts said.
These include the Winter Energy Payment and the Warmer Kiwis Homes programme, which helps homeowners with installing insulation and heating devices.
The National Party’s coalition agreement with New Zealand First includes a promise to “assess and respond to the impact that energy prices have on inflation including consumer-led institutional improvements”.
Watts said he understood the impact energy prices have on inflation and was working with Minister for Resources Shane Jones to address this.
“We have a significant programme of work under way to promote competition and deliver electricity at internationally competitive prices.”
Jamie Ensor is a political reporter in the NZ Herald Press Gallery team based at Parliament. He was previously a TV reporter and digital producer in the Newshub Press Gallery office.
