Switching Power Providers In NZ? Read This Guide

Date Jul 1, 2021
Blog category Power
By Khristine Eusebio
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Electricity bills are expected to increase during winter, which is why it's best to find out if you're getting your money's worth on your current power plan and provider.

There are many factors why your bills increase as the weather gets colder. An obvious answer is that people consume more electricity during winter, mainly, of course, to keep themselves warm. This means using heaters, electric blankets, and taking more hot showers.

Why do electricity bills increase during winter?

There are additional costs that you're paying in your power bill other than the electricity itself.

How it works is that electricity travels from the electricity generator, through the transmission grid, then into the local networks. Because many people use their heaters during colder months, lines companies have higher costs since they have to pay a fee to use the transmission grid. Lines companies pass these fees onto retailers, who will then decide how to distribute the costs onto consumers.

This means that some of the money that goes into your monthly power bills is used to pay for the cost of generating electricity and bringing said electricity into your house.

It will depend on the retailers how they set prices for consumers. There are several options, including evening out their price structure by setting one price that will cover them for any changes in prices over a year, or a spot price contract, which means they'll pass on the cost of electricity at the time the consumer is using it.

Generation costs can change.

The bigger the electricity consumed, the more that electricity generators must supply to consumers. New Zealand's leading sources of electricity are through renewable generation like hydro and wind, which is usually enough to keep electricity prices at a reasonable price. However, the demand increases during winters, so we rely on other resources to generate more electricity.

Gas and coal are usually used during times like this to make sure there's enough power to keep everyone's lights on. However, generating power from gas and coal is more expensive, and the extra costs for those are reflected in the wholesale market, which is then passed onto customers.

How do I know if it's time to switch to a new provider?

High electricity bills.

If your monthly electricity bills just keep getting higher and higher despite your attempts to lower them, it might be because you're on the wrong plan or with the wrong provider.

Bad customer service.

Having a provider with excellent customer service is essential. After all, they're responsible for helping customers whenever there's a power-related problem in a household. If your current provider has terrible customer support, it might be time to switch to a different provider with great services and can attend to your power needs at any given time.

You're moving to a new place, and your current provider is not available there.

Do note, though, that switching to a different power provider might mean paying for termination fees if you're in a contract with your current one, so make sure to review your current agreement to know more about your existing rates, penalties, etc. Sometimes, it's better to wait for your contract to finish first before looking for a new provider.

What are the pros and cons of switching power providers?

Pros:

  • It might lower your monthly electricity bills.
  • Better customer service.
  • More discounts and rewards

Cons:

  • You might have to pay termination fees if it's before the end of your current contract.
  • You might still end up in the wrong plan if you don’t do your research.

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What should I consider when switching power providers?

Know your needs.

If you feel like you're not getting everything you need from your current provider, no need to worry because there are plenty of other options to choose from that can better serve your power needs.

Potential for value

One of the most important things to consider if you're planning to switch to a different electricity provider is how much you will save on your monthly bills. Make sure to compare your current power bills and power provider's rates to what other providers offer before making a decision. After all, you don't want to end up switching to a power provider that charges more.

Good for the environment.

If you want to reduce your carbon footprint and contribute to preserving our environment and natural resources, switching to a more sustainable power provider is one way to do so. Most NZ power providers today are doing their best to provide clean energy to their customers, so make sure to read about their values and mission, and vision to find out if it matches yours.

Know which type of user you fit into.

Another thing most Kiwis tend to overlook before choosing a power plan is not knowing which type of user they are. New Zealand has two types of power plans: Low User and Standard User. It's important to know this because the rates charged on customers vary depending on their user type, which means you can end up paying more than you should for electricity if you're in the wrong one.

It's easy to find out whether you're a Low User or Standard User as there are guides available online to help you. Factors such as the number of people you're living with, how many appliances you have in your home, your average power usage, and whether you're using gas are considered to know which type of user you fall into.

Ready to make a switch? Don't forget to consider the following:

Look for any contract stipulations that might be costly such as:

  • Termination fees
  • Supply price per kilowatt-hour
  • Length of contract (if there's any)
  • Auto-renewal

Compare your options!

Finding the right power provider for you doesn't have to be complicated. A comparison tool can help you find the right power plan and power provider in just a few minutes. The tool lets you compare options based on your needs, location, and budget.

Start comparing today and score amazing power deals, right here at CompareBear!

About the author
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Khristine Eusebio

Khristine E. is an all-around creative who has dabbled in different fields, including advertising and social media. She spends her free time exploring TikTok and the weird corners of the internet.

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