New price monitoring shows competition strengthening

New power price data released today shows the Government’s 2010 electricity reforms are making a real difference for consumers, says Energy and Resources Minister Simon Bridges.

"The sales data released by the Ministry of Business, Innovation and Employment for the year ending March 2014, shows the lowest annual price increase since 2001 at 2.3 per cent,” Mr Bridges says.

“Discounts and other benefits from retailers are becoming the new norm in an increasingly competitive electricity market and the new data captures what consumers have actually paid for their power, rather than the advertised price.”

MBIE has also released the June quarter of the price indicator known as the Quarterly Survey of Domestic Electricity Prices (QSDEP), which captures the latest April price increases.  

For the June quarter, there has been an increase of 2.3 per cent.  This was driven by a 6.7 per cent increase in lines charges — the component regulated by the Commerce Commission — as retailers passed on the significant investment costs associated with upgrading local networks. 

The energy component — the part subject to competition — decreased by 0.7 per cent. 

Mr Bridges says competition is the best way to keep prices down and the latest electricity data shows that the Government’s 2010 reforms have helped bring runaway power price increases under control. 

“Since the National-led Government took office in 2008, we have halved the power price increases seen under the previous Labour Government.” 

Latest figures released by the Electricity Authority show that consumers can save, on average, $155 per year by switching power retailers.

“I encourage consumers to continue to shop around for the best deal,” Mr Bridges says. 

The latest electricity price data can be found here: http://www.med.govt.nz/sectors-industries/energy/energy-modelling/data/prices/electricity-prices

Editor's notes:

In March 2014, the Minister of Energy and Resources announced changes to improve electricity price monitoring and provide more accurate information about how the market is performing. http://www.beehive.govt.nz/release/changes-improve-electricity-price-monitoring

The previous way electricity prices were monitored wasn’t detailed enough to capture all the discounts and benefits being offered as a result of an increasingly competitive electricity market.

MBIE has worked with electricity retailers to develop the new approach, which reflects what people have actually paid for their electricity, including discounts and benefits. 

The new data is based on the actual volume of electricity sold and the total revenue, to give the average price paid per kilowatt hour.  It includes prompt payment, multi-fuel and online discounts, as well as incentive and retention payments, and rates paid by consumers on fixed-term plans.

MBIE and the Electricity Authority will continue to work to improve electricity price data, including access to, and analysis of, more detailed consumption data with a view to making this publically available in 2015.