Wellington Electricity "Time of Use" Price Increase: What Does This Mean For Consumers?

Wellington Electricity's prices have stayed the same since 2017 and have reduced their prices by 14% last year. However, since April 01, 2021, their electricity lines charge prices have increased by about 5% in all price categories. Lines charges make up around a third of your electricity bill and the current prices are made up of a 1% increase in Transpower’s lines charges and a 4% increase in Wellington Electricity's distribution lines charges.

Just recently, a couple of power providers have already announced a price increase to cope with energy retailers' pricing changes. The Electric Authority has released an updated consumer care guidelines that will prohibit NZ power providers to charge some customers more than others for the same service, and more. The guidelines will take effect on July 01, 2021, and retailers are expected to comply with them fully by December 31, 2021.

What makes up an NZ power bill?

An easy way of understanding how these latest changes can impact your bill is to know what makes up New Zealand's electricity market, which consists of a number of suppliers:

Transpower's charges (transmission charges), which make up around 10% of your electricity bill, are added to Wellington Electricity (distribution charges) to make up "lines charges". Retailers then repackage these charges together with other costs that will complete the final retail price they offer to customers.

What has changed?

Wellington Electricity's network has busy times, and while they can build a larger network to adapt, this would also mean increasing the costs to consumers. This is why WE encourage people to use the network when it's not as busy, so they can keep their prices lower.

That said, they have decided to increase the residential prices during busy times (peak times) and cheaper during less busy times (off-peak times).

This type of pricing is also referred to as "Time of Use". ToU was first introduced in 2020 as an optional pricing category for retailers. You may check their website to know how ToU prices are applied and how consumers can benefit from the latest prices.

Time of Use pricing is used to calculate the amount of electricity used at certain times of the day. Unlike traditional pricing where the prices remain the same throughout the day, electricity rates with ToU pricing vary depending on when electricity is being used.

One way for the consumers to save money on the lines charges part of their electricity bill is to use electricity outside the busy times instead of peak hours. Make sure to check with your electricity provider if they'll be offering these prices.

What are Wellington Electricity's plans?

WE has been cooperating with other electricity industry groups to work on "Managed Electric Vehicle (EV) Charging". This concept offers cheaper pricing options for consumers who allow rescheduling the time an EV charges so it lowers network congestion and rewards them with cheaper prices. This pricing option is set to be available by next year.

You may check the Wellington Electricity Time of Use Pricing and other types of pricing here.

Aside from checking with your electricity provider, you may also compare retailer prices to find the best power deals for your household!

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