More brands and more choice as competition increases

More brands and more choice as competition increases again in the retail electricity market
5 July 2016

The latest data released by the Electricity Authority confirms 2015 was another landmark year for the residential electricity market, with a record number of brands available for consumers. The Authority’s review, released today, also shows a significant improvement in the options available in regional areas of New Zealand.

As at 31 December 2015, twelve of New Zealand’s sixteen regions experienced an increase in the number of retail brands available for consumers to choose from. Across New Zealand there were 31 retail electricity brands available, backed by 20 parent companies. This compares to 24 brands backed by 15 parent companies as at 31 December 2014.

2015 was a record year for electricity switching, with 417,784 consumers changing electricity supplier during the year. Of these, 384,841 were residential consumers. The average amount New Zealanders could save in a year was $175 if they switched to the cheapest deal in their area. If all Kiwis switched retailers in 2015 they could have saved a collective $307 million.

Carl Hansen, Chief Executive of the Electricity Authority says, “Our review shows there are a large number of engaged consumers. This, coupled with more retailers in the market and more choice from existing retailers, is helping to create an even more competitive residential electricity market. All the market competition measures we monitor showed improvements in 2015.”
Alongside the regional expansions, the Authority’s report highlights the growth of small independent retail brands in 2015. Collectively, these brands now have 78,975 customers, an increase of 12 per cent when compared to the year ending 31 December 2014. Mr Hansen says, “While many of these retailers remain small, they are adding competitive pressure from the margins, which means the larger players need to keep innovating in order to maintain their market share.”

“As well as more choice in the number of retailers available, a big trend in 2015 was more innovative electricity plans and payment options on offer. The number of pre-pay electricity contracts has increased substantially. At the end of 2015 there 43,560 pre-pay accounts, compared with 30,804 pre-pay accounts at the end of 2014. There is also a trend for contracts that have different pricing at different times of the day—119,953 consumers are now on this type of contract.”

The Authority’s review lists a range of other innovative options that are now available to electricity consumers including one retailer offering a ‘free hour of power’, one retailer bundling electricity with gas, telecommunications and pay TV, other retailers passing on spot electricity prices and a range of new consumer apps and web tools available to help customers manage their bills or monitor their usage online. Some retailers are now offering electricity plans targeted to electric vehicles or solar schemes.

Mr Hansen says, “All of these choices mean consumers should regularly check they are on the best electricity option for their circumstances. The What’s My Number website (www.whatsmynumber.org.nz) is the best place to check what options and savings are available.”

A full version of the Electricity Authority’s review of the 2015 residential electricity market is available at http://www.ea.govt.nz/monitoring/residential-electricity-market-performance/2015/

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