Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Comparing household power price increases

Comparing what household power prices would increase if they had the prices faced by wholesale power users’

”If households had a five fold increase in the energy component of their monthly power bill, they would be paying $250 per month instead of $80 per month,” said Ralph Matthes, Executive Director of the Major Electricity Users’ Group (MEUG).

“An average household pays approximately $80 per month for their electricity – about half of that is for the local distribution and national grid transport or line charges, and the balance is for the electrical energy. Wholesale users’ of power have this month had spot prices that are between 5 to 6 times average prices, ie from about 5 c/kWh usually rising to between 25 to over 30 c/kWh averaged over a day. Households average energy charges are 7 c/kWh.

“If the energy component of an average households monthly power bill were to increase five fold from 7 c/kWh to 35 c/kWh the energy charges would increase from $42/month to $212/month and the total power bill including line charges would therefore rise from $80 to $250 per month.

“Householders don’t immediately see volatile changes in spot prices partly because they pay a premium for certainty (this explains partly why householders average energy price is 7 c/kWh and non-residential is less, the other reason being different load factors during the day, ie households use more power at peak times whereas industry uses relatively more power at non-peak times). In the long run household tariff prices will tend to follow the overall trend of spot price movements.

“In our view the market power of the existing vertically integrated suppliers provides very weak incentives to develop innovative risk management products to better balance competition for fixed price variable volume consumers (ie households) with products for larger consumers. This results in large wholesale users’ becoming the default slack forced to drop demand when spot prices rise. If the market were functioning better the share of risk between large and small users’ would be more efficient. Until the market is better able to manage dry year risk, the Government must appeal to all classes of consumer to conserve energy when spot prices such as those seen this month signal an impending supply shortfall,” concluded Mr Matthes.

© Scoop Media

Business Headlines | Sci-Tech Headlines


I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>


Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>


Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>


Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>


Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>


Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news