The winter chill is about to arrive which means temperatures will soon be falling and electricity bills, rising. So we thought it worth sharing some tips on ways to keep those power costs to a minimum.
There are really only two ways to save money on power – either pay less per unit for use, or use fewer units.
But first let’s deal with some basics about power. The wholesale power price fluctuates by the minute based on demand. You can see the trends live on www2.electricityinfo.co.nz. At the time of writing the average wholesale price across New Zealand was 5.02c per kilowatt hour. This is what it costs the electricity retailers to buy the power they sell to you.
If you have a look at your latest power bill you will see how much the retailer is charging you per kWh. Where we live, a major supplier is charging 35 cents per unit for ‘anytime’ use and 23 cents for ‘controlled’ use, where they can interrupt the supply when the wholesale price gets too high.
The difference between the wholesale and retail rates covers the network supply costs (maintaining the lines etc), the retailer’s costs, and their profit margin – including a margin for risk, since they must wear the cost if there is any short-term spike in the wholesale price.
Well, that’s how most retail electricity suppliers work, but not all.
A new retailer on the scene is a company called Flick (flickelectric.co.nz). It uses a different pricing structure.
In very general terms it charges a daily fixed rate, (for a standard user, for example, it is 162.66c of which 40c goes to Flick and the balance pays for the network and metering costs), a variable charge per kWh (eg 8.063c of which 1.5c goes to Flick and the balance mainly to the network/line company), and the spot rate – whatever that may be. On average the spot rate is 7.5c but that is the part that changes. So using the average spot rate, your cost with Flick may reasonably be 162.66c a day plus 15.56c per kWh.
Flick has a different plan with lower daily rates for low users. But on the face of it, those who can switch their power use to off-peak times, when the wholesale price is low, may want to look at Flick – even if it does require a bit of thought and management to maximise the advantages.
There are of course other companies that may provide cheaper power options for you, and since now is the time to be looking around, a good place to start is www.powerswitch.co.nz – it has a number of features, but the most important is the calculator that shows how much you can save by switching to another power provider. The calculation is tailored to your area and your power consumption and shows the dollar savings over a year. There is no doubt it has created greater competition in the retail market place and that has to be a good thing for consumers. It’s well worth a look.
Another great site to visit is energywise.govt.nz, which has a wealth of ways to save money around your home, from appliances (for example, fridges and freezers work best when full and a freezer is most energy efficient at between -15 and -18 degrees, and a fridge at between 2 and 4 degrees), to vehicle running costs, and even to details on funding available to help you save energy.
Also, when buying new appliances, make sure you look out for the star rating sticker. This shows how much energy (in kilowatt hours) the appliance uses in a year. From this it is easy to calculate the annual energy cost. For example, if the sticker says 433 kWh, and energy costs say 30 cents a kWh (check your last power bill to see how much you are paying), then the annual costs will be $129.90 a year (433 x $0.30). Most appliances have a ten-year life so the life-time cost would be $1,299, which may be as much or more than the purchase price and should be taken into account when buying an appliance.