Talk Money: December 15, 2015
You might have noticed you have been getting more phone calls or knocks on the door from people asking if you want to switch power companies.
It’s a sign that competition is heating up in the electricity sector.
Five years ago there were 12 electricity retailers in New Zealand, with 17 brands. Now there are 22 retailers and 32 brands.
The four biggest companies still have around 80 percent of the market, with around 1.5 million residential connections. But there has been a rapid growth for many of the smaller players including Glo-Bug, Energy Online, Nova and Flick. They collectively grew by 23 percent in 2014.
The medium sized players like Trust Power, Todd Energy and Pulse have also grown their customer numbers. Pulse had fewer than 3,000 customers back in 2010 and now has more than 50,000.
The Electricity Authority says retailers have to compete hard to maintain or grow their customer base, which has led to more innovative marketing and pricing options.
One way they are doing that is to offer more pre-pay or time-of-use packages.
You do not need to wait for a knock on the door before shopping around.
Websites like whatsmynumber.org.nz and powerswitch.org.nz allow people to compare prices.
The Authority says in 2014 more than 385,000 households switched electricity providers. Collectively they could have achieved an annual saving of $281 million or an average of $162 each.
Costs are coming down. The Ministry of Business, Innovation and Employment says the average cost per unit of electricity fell 2.8 percent in the year to September.
That might surprise many people who feel their power bills are going up. But they may find their total consumption has gone up, or they have not shopped around for a better deal.
The Ministry says domestic use rose 5.3 percent in the September quarter.
MBIE's Manager of Energy and Building Trends Peter Ellis says, "This drove the overall rise in electricity demand of 1.7 per cent since the previous September quarter, with demand from the industrial and commercial sectors decreasing over the same period."
The Ministry's report also shows the amount of electricity generated from renewable energy increased slightly to 81.8 percent in the September quarter.
Wind generation helped lift the renewable percentage, increasing eight percent over the period.
Solar generation also increased 92 per cent over the same period. There were 7,409 connections by the end of the September quarter.