Why are Low User Prices Increasing?
In the New Zealand world of power, there have been traditionally two types of users – low and standard users.
Households on low user plans typically pay a discounted fixed charge. However, the low user daily charge is in the process of being phased out across the country. This means that the maximum daily charge will be increasing gradually by 30 cents each year until 2027. In 2027, the low user regulation will be completely phased out and removed, which means that power companies won’t offer a discounted low-user plan anymore.
What is the Reason for the Increase?
The low user plan was originally intended to help reduce the costs for households that don’t use much electricity. It was supposed to help lower power bills for low power consumers and low-income households. However, they didn’t help all low-income households and in fact, pushed some into more hardship.
The government believes that the low-user fixed charge unfairly benefited wealthier households who had low electricity usage, while placing a burden on lower-income households who used a lot of electricity. This burden can have many negative impacts, particularly on low-income households who may, for example, choose to under-heat their homes during the cooler months to save money on electricity, and therefore, hurt their health and wellbeing.
The phase out of the low user price is designed to help combat this disparity. However, the increase in fixed charges is being done so over 5 years to help moderate the impact of the rise in costs on low-use households.
Genesis Energy Price Increase 2025
Kiwis on low use plans will continue to feel the pinch of the cost of living. Genesis Energy is one of the many power companies increasing their prices in accordance with the phase out of the low daily fixed charge.
The low user fixed charge was .60c in 2023, and .90c in 2024. According to the Ministry of Business, Innovation & Employment, the maximum low fixed charge, excluding GST will become $1.50 a per from 1 April, 2015.
Many power providers will also be raising their rates in 2025 in accordance with increasing costs within the industry, according to the Commerce Commission. This increase in prices will help ensure the power industry, including local and national grids, lines, and technology, are upgraded and maintained to make sure all Kiwis have access to enough electricity. The Commerce Commission predicts a further rise in electricity demands across the country in 2025, particularly in winter.
While the low user regulation is being phased out, it’s a good idea to know which plan you are best suited to. If you use 8,000 kWh or less of electricity each year (or 9,000 kWh or less if you're located in Christchurch and below), you would generally be more suited to a low user plan. However, if you use 8,000 kWh or more electricity each year (or 9,000 kWh or more if you're located in Christchurch and below), the standard user plan would be your better suited option.
Compare Power Companies and Plans
While we can’t entirely escape rising costs within the power industry, we can make steps to help ensure we aren’t paying more than we need to. Once you know whether you are a low or standard user, be sure to jump on Power Compare to find the cheapest power company available to you.
Simply type in your address, select low or stand user, and we will show you all the power plans and providers available to you so that you can compare all the options side-by-side and make a fully informed choice. Secure cheaper rates now before they go up! This is the best way to unlock savings that will make a difference in your budget, and help you feel that little bit better about your finances. There are so many benefits to comparing, including saving money. So don’t miss out! Compare and save on power today!
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