Winter is Coming, But It’s Not White Walkers We Should Be Worried About

Fergus Goodall Smith

Does it seem like winter came early this year? Your power bill might make you feel like it did. The Commerce Commission recently completed a review into the revenue limits for power companies. They expanded these limits for energy retailers to deal with ‘greater transmission and distribution costs’. The Commission indicated that households would see a $10-$25 increase at the bottom of their power bill. Vector, an Auckland lines company, announced an average increase of 21% to its charges. Eye watering, I know. These changes came into effect on April 1^st, right as Aotearoa stands on the precipice of winter, where energy use generally goes up. 

Abby Damen of Consumer NZ told Salient that the problem lies with only a select few companies generating the energy and therefore having more control over what they charge. These companies are called ‘gentailers’. “We’ve been concerned for years that a chronic lack of investment in the new generation has seen us lurch from energy crisis to energy crisis” says Damen. “While we have about 30 electricity retail ‘brands’ to choose from, around 85% of New Zealanders are with one of the original, large gentailers - Contact, Meridian, Mercury or Genesis.” Damen says that the market is not as competitive as it could be, and new companies get squashed by the big players. Just last week it was announced that Flick Electricity, a small power retailer, would be swallowed up by one of the big four, Meridian Energy. 

These players can make their deals seem far more appealing than others, when in actuality, for your particular situation, they could be costing a heck of a lot more than other plans. One such option is Contact Energy’s ‘Good Nights’ plan, which gives your household free power from 9am to midnight. There are hitches though. The plan doesn’t work on weekends, and the fixed daily charges and the charge per kilowatt hour (kWh) when the power isn’t free are significantly higher than plans that have a more standard flat rate throughout all times of the day. If those free three hours aren’t used to maximum effect, you’ll be broke next time your bill comes round. 

It’s also important to note that the free power hours do not cover gas usage. If you do use gas, that’s your dishwasher, stovetop, showers, and washing machine; all appliances Contact recommends you use during your free power hours! The fact that gas is excluded is mentioned at the very bottom of the page. Students got in touch with Salient regarding painfully expensive power bills. Most of them were with Contact on the Good Nights plan. One flat was paying $376 for just three tenants. Another bill clocked in at $286 for four people, who had not been using heating throughout the whole billed month. Last but not least, a group was hit with a whopping $513 tally. “Not using heating means our cold, damp flat gets colder and damper,” said one student. “I can’t afford hot showers longer than a minute,” said another. This is energy poverty, fuelled by exorbitant energy prices. 

Salient reached out to Contact Energy with these grim stories. Contact said they couldn’t comment on individual household’s bills. When asked if they were misleading customers about the Good Nights plan, they said they believed their pricing to be transparent enough. Regarding whether they were exploiting the April 1^st revenue expansions by the Commerce Commission, Contact told Salient that the cost of supplying energy and strengthening energy infrastructure would be reflected in their pricing, unfortunately. “We know things are tough for Kiwis right now” said Michael Robertson, Acting Chief Retail Officer at Contact, “so we’re doing everything we can to limit the impact to customers by not passing on the full cost of electricity.” Thank the lord! Contact Energy’s underlying profit for the 2024 financial year was $675 million dollars, up $100 Million from the previous year. In 2023, the big four gentailers were earning a combined $7.4 million a day. Phil Squire, Fair Energy Manager at Toast Electric, Aotearoa’s first non-profit energy company, says the gentailers main goal is to maximise profit. “Structuring themselves to provide lower prices as an industry wouldn’t please their boards or shareholders”. Womp womp for us. 

There is a fight to be had though, and ways to cushion the energy blow. Powerswitch, a website created by Consumer NZ, allows you to compare power plans for your exact address. “We find most households coming to Powerswitch, discover they are paying more than they might need to. For example, 93% of users could find savings of more than $100, 73% could be saving more than $300 and 61% of users could potentially save more than $400” says Damen. Victoria University has also confirmed to Salient that it will run its Winter Energy Grant this year, giving flats the chance to apply for a grant in order to warm their whare over the colder months. In Parliament, Green MP Fransisco Hernandez has lodged a member’s bill in the ballot that adds students to the list of beneficiaries that receive the Winter Energy Payment. “While pensioners and beneficiaries rightly receive the Winter Energy Payment to help cover the winter power bills, students on low incomes aren’t afforded the same support” says Hernandez. “Students are struggling to pay the bills, and living in cold, damp housing. That’s not good for students – it’s bad for their health, their education, and their quality of life. My bill fixes that”. Salient asked Energy Minister Simon Watts…yes Watts, if he believed students should be included in the payment. “[The payment] is currently targeted at individuals over 65, we don’t have any plans to change that,” said the minister. There are actually ten types of beneficiaries who can receive the payment currently, of which only two require you to be over 65. 

Josh Robinson, Welfare Vice President at VUWSA, is helping to champion Hernandez’s bill. Robinson told Salient that VUWSA will re-launch its petition calling on the New Zealand Government to extend the Winter Energy Payment eligibility to include tertiary students. Though Robinson says negotiating with the current government can be like talking to a rock, he told Salient that students have the potential to be a bargaining powerhouse with opposition parties, ensuring student welfare is a solid part of their policy when the next election comes around. Winter is coming, so take a look at Powerswitch, buy a hottie, and brace yourselves.

Link to Powerswitch: www.powerswitch.org.nz 

Link to Toast Electric: www.toastelectric.nz 

And surely some white walkers with Meridian, Contact, Genesis, and Mercury’s logos on their heads.