Affordable homes could become powerless: the loss of low user daily charges

First published on LinkedIn, 13 December 2024. A short update on where the rules have got to sits at the end.

Fixed price charges will soon negate any savings made on electricity use.

We are being pushed to save on power costs. Reducing electricity bills is all great, but any savings are consumed very heavily by the transfer to significantly increased daily fixed charges (incentivising asset growth).

No longer will ‘Granny’ get a low user fixed rate to her one bedroom home where she could choose to pay a higher variable cost (within her control). Instead she pays a standard rate, the same as everyone else, with slightly lower variable costs.

I do get some of the logic but it isn’t washing well with me.

The FIXED rate seems to be linked to the value of the asset base held by the lines and transmission companies. Is it competitive? Are they actually replacing their depreciated assets?

Why is NZ so HEAVILY stacked against our vulnerable: the one control Granny had was to manage her power consumption, now she is literally POWERLESS.

Come on NZ think about the lack of choice given. Give those that need it a CHOICE.

Source: RNZ, Power prices: electricity costs for households, businesses set to climb over next two years

Where this has got to

Since I wrote this, the maximum low fixed charge has gone up again. It is $1.80 a day from 1 April 2026. The regulations are removed on 1 April 2027, and from that date power companies no longer have to offer a low user option at all.