Planned price rises risk worsening hardship

Two out of three residential consumers are worried about their electricity bill

Almost half of households and more than a third of small businesses are finding it harder to pay electricity bills than a year ago

Affordability and resilience of the network to storms remain top issues of concern

Households and small businesses are feeling the chill from rising electricity bills according to the third annual Sentiment Survey undertaken by the Consumer Advocacy Council.

"Our survey results underline the challenges facing many small electricity consumers as the pressures stemming from the cost of living crisis and increasing electricity prices continue to take their toll," said Deborah Hart Chair of the Consumer Advocacy Council.

The survey shows 67% of households are worried about electricity costs, up from 58% in 2022.

Among small businesses, more than a third (38%) are finding it harder to pay electricity bills than they were a year ago and 32% say power bills are putting pressure on their finances, up from 21% in 2022.

Affordability of electricity remains a top concern, cited by four out of five residential and small businesses consumers with about two thirds believing electricity will become unaffordable for some consumers in the next 10 years.

Survey results also suggest the electricity market is getting harder for consumers to navigate as retailers bundle power with other services, such as broadband.

"One in four consumers who have bundled plans said they didn’t know if they were getting a good deal. One in 10 actually discovered that their costs had increased. Bundled plans can be deceptive."

Hart said it is also concerning that very few consumers are confident they are going to get a better deal from electricity retailers over the next five years.

"This low level of confidence has persisted over each of our three annual surveys."

Just one in five residential consumers and small businesses were confident the market will deliver better value for money in the next five years, similar to results of the previous surveys in 2022 and 2023.

In addition, a third of consumers who thought of switching to another retailer did not find the savings worth the effort to switch.

"New Zealand’s approach has relied heavily on promoting switching to drive competition and better prices for consumers, but evidence shows switching rates remain relatively low," said Deborah Hart.

"There are other measures that could help, such as ensuring retailers are regularly telling their customers whether they are on the right plan for their budget. The Electricity Authority should make a ‘best plan' notice mandatory."

There were also bigger issues with the way the electricity system worked and how it was regulated that needed to be addressed to ensure power prices were fair and affordable for all.

"With affordability remaining a top concern, the Council urges regulators and government to investigate whether current regulatory settings are fit for purpose.

"Demand for electricity is rising with a growing population and increasing electrification of appliances and cars. But consumers can’t keep paying higher prices for an essential service," said Deborah Hart.

Summary of key findings - Sentiment Survey 2024

The survey was conducted for the third time in May 2024 to understand residents’ and small business’ views of the New Zealand electricity sector. The survey collected the views of 500 small businesses and 1,000 residents.

Cost concerns have increased over the past two years

Residential consumers concerned about electricity costs (p21)

2022: 58%

2023: 65%

2024: 67%

Small businesses finding power bills put pressure on finances (p58)

2022: 21%

2023: 28%

2024: 32%

Close to half of households and more than a third of small businesses are finding it harder to pay electricity bills than a year ago

Residential consumers (p22)

2022: 42%

2023: 42%

2024: 45% (52% for renters)

Small businesses (p58)

2022: 28%

2023: 33%

2024: 38%

Affordability and resilience remain the top two issues of concern

Residential consumers concerned about affordability (p28)

2022: 80%

2023: 82%

2024: 82%

Small business consumers concerned about affordability (p64)

2022: 86%

2023: 87%

2024: 86%

Residential consumers concerned about system resilience to extreme weather (p28)

2022: 74%

2023: 78%

2024: 80%

Small business consumers concerned about system resilience to extreme weather (p63)

2022: 84%

2023: 87%

2024: 86%

Confidence is low that the electricity market will deliver better value for money in the next five years

Residential consumers (p26)

2022: 23%

2023: 22%

2024: 20%

Small business consumers (p61)

2022: 22%

2023: 22%

2024: 21%

Relying on switching to drive competition and better prices isn’t a fix-all (p32 & p68)

37% of residential consumers and 34% of small businesses looked at other electricity providers but decided not to switch. The main reason was that the savings were not good enough to bother changing.

Bundled deals spark concerns (p38)

24% - one in four residential consumers who have bundled services with their electricity provider (e.g., power + broadband) found it hard to know if they were getting a good deal.

10% - one in 10 consumers on bundled deals later worked out that the services were more expensive when bundled.

Background on survey

The Council first commissioned Verian in 2022 to conduct research with households and small businesses in order to:

gather information to provide a baseline for future research

understand small consumers’ views regarding electricity in New Zealand

create a high quality and robust survey which can be used to build understanding year on year and inform the Council’s work.

The Consumer Advocacy Council

The Consumer Advocacy Council is the independent advocate for residential and small business electricity consumers in Aotearoa New Zealand. It aims to protect the interests of more than five million residential consumers and half a million small businesses in relation to electricity. The council was established in 2021 following a recommendation from the 2018/19 Electricity Pricing Review which found that small electricity consumers were struggling to be heard by the electricity sector.

The council will be wound up on 28 June 2024 following a recent government Budget decision.

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