What does your power bill pay for?
A typical residential power bill contributes to the following costs, according to Electricity Authority data:
- 32% for generation: funding the production of electricity from hydropower, geothermal, wind and solar, with backup from gas and coal at peak times.
- 27% for distribution: supporting Firstlight Network to build and maintain the power lines in Tairāwhiti and Wairoa, so the electricity can get from the grid to your home.
- 15% for retail costs: supporting operating costs for your electricity retailer (Mercury, Genesis, Contact or Meridian, for example).
- 10.5% for transmission: contributing to the cost of building and maintaining New Zealand’s national grid.
- 3.5% for metering: covering the cost of reading and maintaining your electricity meter.
- 0.5% for market governance: this funds organisations that regulate the electricity industry, as well as energy efficiency programmes.
- 0.5% for market services: paying for the organisations that operate the electricity market.
Starting at the top of your bill: the essential information
Your power bill is packed with numbers and most of us only focus on what we owe for the month. But if you know a bit more about the other details, it might help you spot opportunities to save money.
The top of your power bill has your details, and the details for your power company. It includes your account number – very helpful if you need support – and the date of the invoice, plus ways to contact your electricity retailer.
Your bill summary
This section summarises what’s due for the month, plus any outstanding charges. It shows the billing period and the due date – paying on time means you will avoid late fees. Ways to pay will be listed on your bill, or visit your retailer’s website for payment options.
You’ll also see the name of the plan you are currently on. This is useful if you want to check whether you could be on a more cost-effective plan, which you can do on the Powerswitch website. This is a chance to potentially reduce your bills by changing onto the best plan for your household.
The bill details: fixed and variable charges
Your electricity bill is split into two items:
- Daily fixed charges, which remain steady throughout the year, no matter how much electricity you use.
- Variable charges for your power plan, often shown in ‘units’. These change from month to month depending on how much energy you use. They’ll typically be lower in summer and higher in winter. You might also notice a big dip when you’re away on holiday.
You can influence the variable charges in several ways. For instance, you could use less power, install more energy efficient appliances, or shift to a lower-cost plan.
However, the fixed charge will stay the same regardless of how much power you use.
A graph showing your power use
Most bills include a month-by-month graph of your power use. This is great for measuring how well you’re managing your electricity.
If you make a change, like installing a heat pump or LEDs, it should start to show up in lower monthly use – tracking your use will give you data on whether your tweaks are cutting your costs.
And don’t forget, if you spot an unexpected spike in usage that you can’t account for, call your retailer and they can help you get to the bottom of it.
Your retailer can help you manage your costs
If you have questions about your power bill, contact your electricity retailer whose details are listed at the top of the bill. The support team can explain your charges and identify the best plan for your household. They can also help if you’re having trouble paying the bill.
If you’re still unhappy with a billing issue, you can talk to the independent Utilities Disputes service – visit the Utilities Disputes website for more information.
