Consumer Benefits From Low Fixed Electricity Charges

New electricity industry statistics indicate that small domestic consumers of electricity have been benefiting from the Government’s policy on low fixed charges, says Energy Minister Pete Hodgson.

Electricity Information Disclosure Statistics 2001 is compiled by the Ministry of Economic Development. It shows that between August 2000 and November 2001 electricity charges for small domestic consumers declined on average by 3.6 percent in real terms.

A small consumer is modelled as one consuming 6,000 kilowatt-hours a year. National average domestic consumption is about 8,000 kilowatt-hours a year.

“This reduction has been one of the benefits of the Government’s policy requiring low fixed charge tariffs,” Mr Hodgson said. “Low fixed charges give consumers, including those on low incomes such as pensioners, greater ability to control their power bills. All domestic consumers now have the option of a tariff with a fixed charge of no more than 30 cents a day plus GST.”

Many commercial electricity consumers also saw their costs go down in the period covered by this report. Prices for a medium-sized commercial customer, modelled at 18,000kWh a year, declined on average by about 9 percent in real terms. For a larger commercial consumer, modelled at 42,000kWh a year, the reduction was about 11 percent.

Large domestic consumers (modelled at 18,000 kWh a year), who do not benefit from low fixed charges, faced a 1 percent average increase in real prices over the period. Mr Hodgson said domestic consumers in some regions had seen moderate to significant nominal price rises since then. Large commercial customers on time-of-use contracts have also seen price rises, including some significant percentage increases on previously low rates.

“Competition remains the essential discipline on prices and I continue to seek steady improvement in the level of competition for both domestic and commercial customers,” Mr Hodgson said.

The statistics (212 pages, 2102KB) are on www.med.govt.nz - see pp206 & 208.
Full link: http://www.med.govt.nz/ers/inf_disc/disclosure2001/index.html

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