Wholesale electricity prices have had one of their biggest jumps in more than a decade, low lake levels and an unexpected decline in output from one of the country's biggest gas fields combining to push production costs up.
Statistics NZ on Wednesday said prices paid by electricity and gas suppliers rose 28.7 percent in the March quarter, while the prices they received only rose 17.4 percent.
"Lower lake levels in the South Island have driven up wholesale prices for electricity generation, while an unexpected fall in production at the Pohokura gas field has seen gas supply prices also increase," said spokesperson Bryan Downes.
"The quarterly price change is the largest since 2018 but is nowhere near the magnitude seen in the 2008 power crisis."
Pohokura is located 4.5km off the Taranaki coast, and is owned by OMV and Todd Energy. It currently supplies nearly a third of all New Zealand's gas.
Before last year's COVID-19 lockdown, Pohokura had seen its output increasing. After going offline for maintenance between March and May, when production resumed it picked up where it left off - but has been going down ever since. At the end of 2021, OMV said it expected Pohokura to produce about 25 percent less gas than previously expected in 2021.
An outage at Pohokura in 2018 saw wholesale energy prices spike 29 percent. They were back down to normal by the June quarter in 2019.
Lake levels in the South Island are only at about 72 percent of the historic average for this time of year, Transpower data shows.
But while wholesalers are footing the bill, most retail customers won't have noticed yet. They only rose 0.4 percent in the March quarter, data released last month showed.
"Wholesale and household electricity price movements can differ due to transmission charges, industrial customers responding to peak-hour pricing, and hedging to manage price volatility," said Downes.
"In general, electricity retailers do not pass on wholesale pricing to households unless they are on a spot price contract."
Statistics NZ data shows residential electricity prices have gone up 25 percent in the past 10 years.