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Low Use Electricity Pricing Plans

The Grey Power NZ Federation has come out strongly against a government decision to phase out low use electricity pricing plans because, apart from the promise of some industry provided support, no other alternatives to assist those experiencing energy hardship have been announced.

Energy and Resources Minister Megan Woods has announced that the current plan which allows for reduced charges for people using low amounts of electricity will be phased out over five years starting in April 2022.

Federation Energy National Advisory Group chair Bern Sommerfeld said the minister had made a fundamental error in assuming that getting rid of low-use electricity plans would create a fairer playing field for all New Zealanders and encourage a switch to electric technologies. “It will do exactly the opposite. Many on fixed incomes will have little or no ability to meet the increased power charges and it will be difficult for older people and families on low incomes to switch to new technologies.

Sommerfeld also said it was a nonsense for the minister to suggest that households on standard-use plans are charged more to make up for the under-recovery of fixed charges from those on the lower rates.

“Many business enterprises have concession rates for pensioners and those on fixed low incomes and these are factored into business plans all across the commercial sector. Electricity is no different with its low use pricing plan. The industry could also deduct a few percentage points off the massive profits it makes each year and treat the provision of electricity as an essential service, as it used to be, instead of a profit-making commodity.

Sommerfeld said the whole electricity industry was in dire need of a complete overhaul and had been since the major restructuring of the 1980s.

“We have already seen this recently on one of the coldest nights of the year, when many households were affected by power outages and some generating facilities were not in operation. There are many things the Government should and could be doing to sort the mess out but targeting senior citizens and those on fixed low incomes is unfair and unwarranted.”

The Federation president, Jan Pentecost, added that:

“Many older people are incredibly anxious at this time due to the negative effects of Covid, the recent loss of banking facilities and cheques and so, and now the loss of cheaper power unless there is sufficient support forthcoming for low - income households adds to this anxiety.”

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