Source: Consumer NZ
Consumer NZ estimates about 140,000 households had to take out a loan to cover their power bill in the past year.
“Across the country, the cost of electricity is a real worry, with one in three people placing it in their top three financial concerns,” said Jessica Walker, campaigns manager at Consumer NZ.
According to Consumer’s latest energy survey,¹ over 360,000 households had difficulty paying their power bill in the past 12 months, and more than a quarter of a million households had overdue fees added to their power bill because they couldn’t afford to pay by the due date.
“Last week we heard from someone whose power bill is overdue for the first time in more than 15 years of on-time payments. Even though they are barely using their heater this winter, they can’t keep up with the rising costs,” said Walker.
Consumer’s energy survey found that 2% of households had their power disconnected at least once in the last year, because they couldn’t pay their power bill.
As well as the risks that come from a household going without power, there can be other long-term implications associated with disconnection due to unpaid bills.
“Disconnection puts you at risk of being rejected by electricity retailers in the future,” said Walker.
Consumer recently found almost 1 in 10 households have been turned down as a customer by an electricity retailer because of a previously unpaid bill.
“For people who can’t secure a postpaid account with an electricity retailer, their only option is prepaid power.”
Prepay price premiums
According to Consumer, many customers using prepaid power are excluded from the sharper promotional pricing offered to entice new customers to postpaid plans.
“We think on average, households using prepaid power are paying more because their credit history means they are excluded from the sharpest prices offered by the cheapest providers on Powerswitch,” said Walker.
“We find it seriously concerning that many people experiencing hardship are unable to access sharper pricing, which could be the difference in keeping their homes warm this winter.”
People are seriously struggling
Last week, Consumer asked whether people were stressed about their bills or finding it hard to pay. Walker said they were inundated with responses.
“We heard from many people who are restricting their energy use, particularly using their heater, to keep their bills down. However, for a lot of people, it’s still not possible to keep up with the payments.
“The word that keeps coming through is ‘struggle’, and for many people, the rising costs and dropping temperatures have led to a sense of despair.
“We keep hearing about exceptionally high wholesale prices and the expectation these will soon flow through onto household bills. We think this means people who are currently just managing to scrape by will soon be struggling too.”
Consumer advises people who are struggling to contact their power provider as soon as they can.
Walker said, “If you’re having difficulties paying for the power you need to be warm and healthy – contact your electricity provider to let it know and ask about its consumer care policy.
“Most power providers have a consumer care policy. If you think your provider isn’t complying with its own policy you can complain to it, and if you’re still not satisfied you can contact Utilities Disputes.”
Note:
¹Consumer NZ Energy Retailer Survey. Every year, Consumer NZ asks New Zealanders about their experience with their power provider to find out how consumers rate their experience. Our data is from a nationally representative survey of 1,999 New Zealanders, aged 18 and over, conducted in March 2024.
