Are Spot Pricing Power Plans right for you?
Power Companies in New Zealand are offering their customers more innovative ways of buying and managing power for their homes. One way you can do this is with a spot pricing power plan. Spot pricing can save a substantial amount of money if you use most of your power at off-peak times.
Is Spot Pricing right for you? Read on to find out more and make an informed choice about Spot Pricing.
How are electricity prices worked out in New Zealand?
Traditionally when you signed up for a new power plan, most customers only had one choice about how to pay for their power.
In New Zealander the five main electricity generators (plus a couple of smaller ones) – Contact, Genesis, Mercury, Meridian and Trustpower - produce electricity from different sources, like thermal, gas, coal, and renewable sources like hydro and wind. The Energy that is generated flows into transmission and distribution networks.
Power retailers buy electricity on the wholesale at a spot price, then charge you an agreed fixed rate when they sell the power on to you. Spot pricing can change every half-hour and varies dramatically depending on supply and demand, season and time of day. However, as the customer, you will pay the same price for each unit of electricity you use, regardless of what the spot price was when you used that power.
What are Spot Pricing Power Plans?
Most power providers use the flat range charge systems, meaning that the price you pay does not depend on the time you use it. As an alternative, you can go with a retailer who is offering spot price contracts. That way the final price you pay will directly depend on the spot price.
Since the spot prices are changing every half hour, your final power bill will include a range of rates.
Is Spot Pricing right for me?
This will depend on how you use power at home. You could save a substantial amount of money by using power at the times when the spot price is low, as opposed to paying a fixed price for your electricity price for your electricity consumption.
However, if you use power at a time when the spot price goes higher than the flat rate, you could pay a lot more than the standard fixed price.
These are the key factors to take into consideration if you are considering a spot price contract
- Budget carefully for varying prices from month to month – sometimes they might be higher than the fixed retailer’s price
- Keep an eye on the spot price and try to reduce your power usage during peak times when the spot price might be higher
- Keep track of your power usage
NZ Power Companies with Spot Pricing Plans
Flick Electric offer freestyle spot pricing contracts. Flick say that their customers can benefit from average or low prices 82.09% of the time, but you also need to be comfortable riding out a few high price events.
The Flick app lets Flick customers view the real-time price of electricity, including the spot price for each customer’s area, it can also be configured to alert customers when prices are exceptionally low, or spiking high.
Alternatives to Spot Pricing
Not sure if spot pricing is right for you? Spot Pricing can offer great benefits, but certainly won’t suit everyone. Here are some other companies that are offering our customers new and different ways to take control of their spending on electricity.
Energyclubnz
Energyclubnz try to offer their customers the best of both world – a predictability lower energy bill every month without the risk of spot pricing. CEO David Goadby says “We deliver electricity at cost for a small weekly club fee and enter into long term agreements with the Generators to deliver a stable low everyday electricity price to our members."
Compare Energyclubnz power plans
Powershop
Powershop allows customers a lower risk way to take advantage of the benefits of spot pricing. Powershop allows you to choose to buy Powerpacks and pay for your power in advance at cheaper rates, or you can choose to pay for your power after you use it as you would under a traditional provider.
Need help comparing the options?
We can help - use our comparison tool to find your perfect power deal!