Kiwis cut heating to save money
An advocacy group set up by the Government to give consumers and small businesses ‘‘a louder voice’’ in the electricity market has signalled it may call for structural reforms of the power industry.
Consumer Advocacy Council chairperson Deborah Hart said research it had commissioned showed 55% of consumers were often only heating the room they were in and 46% reported that they often put on extra clothes to stay warm.
The research indicated people had less trust that their electricity providers would provide them with value for money than they had in banks, telcos or KiwiSaver providers to do the same, she said.
More than a third of the 1441 people surveyed reported frequently not putting on heaters over the past year to save money.
‘‘This is a real wake-up call for electricity retailers,’’ Hart said. ‘‘There is something that needs to be done here – we shouldn’t just accept high prices.’’
The council held its first meeting in August, when it said that one of its first goals would be to improve the consistency of information in power bills.
But Hart appeared to suggest the council had ambitions for more far-reaching reforms that could put it at odds with the sector’s regulator, the Electricity Authority.
The Electricity Authority said in report in October that structural reforms of the industry were ‘‘not currently justified by the available evidence’’.
But Hart queried why consumers were paying prices commanded by expensive fossil-fuelled generation for the majority of electricity that is generated in New Zealand from cheaper renewables, which include hydro-electricity and wind power.
‘‘It may be that the market needs some kind of restructure. It has been put to us that the generators that are generating through thermal should be on a separate market to those that are generating from renewables.’’
Hart’s comments come amid debate over the profits of state-controlled generators Meridian, Mercury and Genesis, which more than doubled to $1.35 billion this year.
Meridian Energy, the country’s largest power company, told the Shareholders Association in March that its shareholders had enjoyed ‘‘double-digit’’ shareholder returns every year since listing on the NZX.
But it dismissed a report by the Major Electricity Users Group last year that it had made $3.5b in excess profits over the previous 20 years.
Electricity Retailers Association chief executive Bridget Abernethy acknowledged the cost of living was causing ‘‘real pain’’ for consumers and said low-quality housing lacking insulation could lead to high bills.
But residential electricity prices had been ‘‘pretty flat’’ over the past five years when compared to other costs, and by international standards ‘‘we do really well on reliability, affordability and sustainability’’.