Tauranga’s population is booming, with new residents lured by the sea and surf. When they hop in the shower to wash the sand off, it’s not so sunny – Tauranga has the highest power bills in the country, which energy and consumer advocates blame on lack of competition and clarity about bills.

Tauranga residents pay 19.4 per cent more for energy than the New Zealand average, and 18.9 per cent more than their coastal neighbour, Whakatāne, according to the latest electricity price report from MBIE.

A new 140-page report on Energy Hardship, released on November 7 under the Official Information Act, says rising energy prices are causing “stress” and “desperation” in families, with families reduced to cooking outside on fires.

“People told us they do not understand the information on their electricity bill, other than the total sum owed. The bills are confusing, and their energy retailer never explained it to them. Most do not even know what plan they are on.”

The Consumer Advocacy Council is calling for better information from power firms.

The report, prepared over two years by independent energy experts, criticises the lack of competition in the electricity market, in which four generator-retailers have 84.3 per cent market share, and 35 independent retailers the remaining 15.7 per cent as at June 2023.

It also recommended the Electricity Authority and Commerce Commission should investigate network pricing methodologies, and that retailers be required to notify customers of the most affordable plan each year.

When Raelene Flay moved into Pāpāmoa 10 years ago and was with TrustPower now Mercury, she was shocked at how high her power bills were.

“We had them come round and check everything, we cut down on everything, but it was still hundreds more than we used to pay.”

When Raelene decided to change to a cheaper provider, she was surprised to find that smaller retailers did not deal with the embedded lines company that provided power to the subdivision.

“Eventually I could switch to Powershop, and my electricity bills are now 30 per cent cheaper – but I don’t like the fact of being locked into one lines company.”

Brett Muir, also in Pāpāmoa, wanted to cut bills by moving from Mercury to discount providers such as Electric Kiwi and Slingshot, but these companies could not use his assigned lines network.

“The lines charges don’t even come up on my bill, so there’s no way of knowing if we are paying above the norm.”

Paul Fuge, Powerswitch manager at Consumer NZ, supports all the new report’s findings, and is pleased it have noted the complexity of billing.

“[Consumer] has been championing the need for more clarity and transparency around electricity pricing. Power bills in particular could be improved,” he says.

“Our Powerswitch service aims to help consumers with their energy decisions, but it will be so much easier for consumers to compare offers if key information on bills was standardised.”

Embedded networks are used in rest homes and shopping malls, but are rare in residences and adds more unnecessary complexity, says Paul.

“Basically, it enables the embedded network owner to clip the ticket on the electricity coming from the wider network that has to pass through their assets in order to reach each resident...The overall result can be higher costs and less choice. So, a poor outcome for those consumers.”

Consumer NZ also has issues with the TECT trust payment methodology, which is unique to Tauranga. Historical customers of Trustpower get an annual rebate, which they lose if they switch companies.

“We believe it is keeping overall electricity prices higher in the Tauranga area than they otherwise would be,” said Fuge.

This system is “anti-competitive” according to Child Poverty Action Group spokesperson for the Western Bay of Plenty, David Riley, who intends to present his objections at the TECT Annual General Meeting in Tauranga on November 8.

“It’s unfair, because it locks people into Trustpower/Mercury, which creates a monopoly in Tauranga, so prices are kept high. Even with the rebate, people would be better shopping around for a cheaper provider.”

Mercury general manager Craig Neustroski told Stuff that the Commerce Commission has considered the impact of the TECT distribution on several occasions and most recently in 2021 as part of Mercury’s clearance application to purchase Trustpower’s retail business.

“There are multiple factors which determine electricity pricing...the cost of generation, distribution, metering and service elements and many of these factors differ from location to location,” he says.

“We also know consumers consider multiple factors when choosing their electricity retailer. We aim to price to a consistent set of principles nationwide, and we do not factor in any local Trust distributions into our pricing as we have no influence over that distribution.”

Mercury is conscious of cost pressures many households are facing and urged anyone struggling to make contact, he said.

“We have limited average total bill increases to between three per cent and five per cent this year and are absorbing our cost increases which are over and above this.”

-Annemarie Quill/Stuff.