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Low fixed charge regulation removal good for Kiwis in need

“The Government’s decision to remove the low fixed charge regulation is a positive move which will stop many low-income households subsidising the electricity of better-off families,” Electricity Retailers’ Association Chief Executive Cameron Burrows says.

“The low fixed charge was a government regulation set in 2004 with good intentions—thinking we should reward those who conserve power and disincentivise heavy use. But it actually disadvantaged households that can least afford it,” Mr Burrows says.

“A well-off couple who can afford insulation and a heat pump currently have an artificially low daily electricity charge because it is subsidised by large families who live in low-quality houses who need a lot of power to heat their home and who pay more than they should.

“That’s not right, and its why this change is a good move.

“Removing the regulation is good for the environment too. The existing rules provide a major disincentive to switching to an electric vehicle and using more clean electricity to help reduce New Zealand’s carbon emissions.

“Most households, including most low-income earners, will be better off from this change. Some who are currently on the low fixed rate may see bills increase slightly – for the majority in this situation the annual change will only be a few dollars a month.

“The electricity sector is committed to supporting customers through the change. All ERANZ members will have ‘low fixed charge specialists’ – so if a household is adversely affected by the change they can have a specialist talk through options for support.

“For example, the industry-led EnergyMate programme provides free in-home energy coaching and community hui to help people who are struggling to make the most of their electricity and cut their power bill.

In addition, power companies have pledged five million dollars to support families in energy hardship through the five-year transition away from the regulations.

“New Zealand has a well-performing electricity sector and removing the low fixed charge regulation will further improve how the sector is performing for Kiwi businesses and households, particularly those struggling with energy hardship,” Mr Burrows says.

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