Energy Minister says future electricity price monitoring will reflect what consumers have actually paid for their electricity

Energy Minister says future electricity price monitoring will reflect what consumers have actually paid for their electricity

Energy and Resources Minister Simon Bridges has announced changes aimed at improving electricity price monitoring and providing more accurate information about how the market is performing.

Bridges said the new approach would provide:

• Information every quarter on the average amount households paid for electricity at a national and regional level – this will reflect discounts received by consumers, such as prompt payment discounts, lower fixed term prices, loyalty rewards, and acquisition and retention payments

• National average prices for commercial and industrial customers

• Backdated information for the past five years, so that longer term price trends can still be monitored.

The first results under this new approach will be released in June, Bridges said.

"Because of the Government’s 2010 reforms, the electricity market is more competitive than it has ever been,"  Bridges said. 

"With more customers switching between retailers and new retailers coming into the market, discounts of up to $300 per year are available to consumers who shop around. 

"While commonplace today, these discounts were a rarity before the National Government’s reforms, and the current way in which we monitor electricity prices isn’t detailed enough to capture these savings.   

"The Ministry of Business, Innovation and Employment (MBIE) has been working with electricity retailers since November to develop the new approach. 

"In simple terms, the changes mean we will no longer publish the advertised rack rates for power.   Instead, future electricity price monitoring will reflect what consumers have actually paid for their electricity, including discounts and benefits.  

"This will provide a more accurate measure of electricity prices in New Zealand," Bridges said. 

"In addition, regional price monitoring will also improve.

"This work by MBIE complements projects that are already underway by the Electricity Authority, to ensure New Zealanders have access to transparent, reliable, and consistent information about electricity prices."

The Green Party had this to say about the changes:

Families won’t be fooled by National twisting the electricity stats

National’s attempt to mask rising power prices by handing control of the statistics over to the power companies won’t fool Kiwi families, Green Party Co-leader Dr Russel Norman said today.

The Government has announced that it will cancel the Ministry of Business, Innovation, and Employment’s Quarterly Survey of Domestic Electricity Prices (QSDEP). The QSDEP is a key source of data on electricity prices, which has revealed that the average family is paying $360 a year more for electricity under National. It will be replaced by data privately supplied by the electricity companies themselves, rather than independently gathered by MBIE from public sources.

New figures from the QSDEP released today show that household power prices rose 2.9% in the past year even as demand fell, and that 70% of the increase came from the electricity companies, not transmission and lines costs.

“National can try whatever tricks it likes to hide the rise in electricity prices. Families won’t be fooled when they open up their power bills,” said Dr Norman.

“National is effectively letting the electricity companies decide what the official statistics say about the price of power. This can only be seen as a further attempt by National to hide the unacceptable increase in electricity prices on its watch.

“The justification that the new figures will include discounts that the companies offer is spurious. The current data already includes online and prompt payment discounts. Including loyalty, retention, and acquisition payments, which only a small number of customers receive on a one-off basis, would give a false impression of the price that families actually pay for the power that they consume.

“The changes will prevent analysis of the price that each retailer charges for power. That looks like an attempt to hide the effect of privatisation because the former SOEs previously had lower power prices than the private companies.

“The latest figures show that Kiwi families continue to pay too much for electricity even though demand is falling. Electricity prices rose 2.9% last year even as demand fell by 2%.

“Today’s figures show 70% of the rise in power prices last year came from the electricity companies, not transmission and lines costs. That makes a lie of John Key’s claim that rising power prices are necessary to pay for investment in transmission infrastructure.

“National should stop trying to twist the stats and face the reality: families are paying too much for power. The Greens’ NZ Power plan will bring prices down, saving families $300 a year each,” said Dr Norman.