Kiwis concerned electricity will become unaffordable as some borrow to pay bills

Many Kiwis are worried that electricity will become unaffordable in the future, with some already having to borrow to pay their bills.

The cost of electricity is a key concern for a majority of New Zealanders, on par with concerns about mortgage or rent costs and second only to concerns about grocery and petrol costs, according to a Kantar survey of 1026 households for the Consumer Advocacy Council.

Half of those surveyed were concerned that electricity would become unaffordable for them over the next 10 years, with 10% already struggling to pay their bills and having to borrow to pay a bill, move to pre-pay options or make special arrangements with their retailer because of financial hardship.

The Consumer Advocacy Council was set up by the Government last year to advocate for consumers and small businesses in the electricity sector and undertook the survey in November and December.

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“The council’s mandate is to be a strong voice for consumers and our regular sentiment surveys will strengthen our ability to better advocate for the change consumers need so that the electricity network is affordable, resilient and sustainable,” said council chairperson Deborah Hart.

The survey revealed 42% of households found it harder to pay electricity bills than a year ago. About a quarter received a larger than expected electricity bill over the year, and 7% were concerned about disconnection or had been disconnected.

Medically dependent households, renters, younger groups, and Māori and Pacific people were more vulnerable to payment pressure, the survey found.

The Ministry of Business, Innovation and Employment (MBIE), which monitors power prices, said that on average, residential consumers faced a 2.1% increase to their power bills in the 12 months to the end of March 2022 compared with the year earlier.

However, when accounting for inflation, prices fell 2.3% over the period, an MBIE spokesperson said. And overall, inflation-adjusted residential electricity prices have been falling since the year ended March 2017.

Still, about a third of people said they were not confident that the market was delivering fair prices and doubted the market would provide better value for money over the next five years.

Electricity providers were seen as offering the same value for money as banks and insurance providers.

Those surveyed said they were most satisfied about the reliability of their electricity supply, but least satisfied with the advice they received on how to save money and with the cost of their electricity.

Just under half of households trusted electricity companies to do right by their customers.

The Consumer Advocacy Council has said that during times of high inflation, it would like to see electricity retailers take great care when considering the price of electricity for their customers.