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Cost of power leaves many consumers in the cold

The Electricity Price Review’s initial report, released today, backs up Consumer NZ’s research that shows rising power prices are leaving many households struggling to pay their bills.

Consumer NZ head of research Jessica Wilson said access to affordable power was a basic consumer right, but the electricity system wasn’t delivering this.

The Electricity Price Review’s report showed consumers had faced significant increases in power costs since 1990. Residential prices had risen 79 percent, while commercial prices had dropped 24 percent.

Ms Wilson said the rapid rise in residential prices had had a major impact on low-income consumers. “While the number of electricity retailers had increased, households finding it difficult to meet costs often had limited choice of retailer. They also paid more because they missed out on prompt payment discounts or were forced to change to a pre-pay meter,” she said.

Consumers on pre-pay meters pay for power in advance and incur fees each time they top up.

Consumer NZ’s survey research shows close to one in five consumers experienced financial difficulties paying for power in the past year.

It also found:
• 14 percent were charged overdue fees
• 13 percent borrowed from family or friends to pay their bill
• 8 percent took out a loan to pay their bill.
The impact of rising prices can also be seen in disconnections for non-payment of bills. Last year, 25,317 people had their power disconnected because of unpaid bills, up from 19,106 in 2015.

Ms Wilson said the Electricity Price Review’s final report, in May 2019, needed to recommend changes to ensure consumers could get power at a fair price.

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