Pre-paid power costing families extra

Unfair differences between pre-paid and normal power prices are costing vulnerable families in some parts of New Zealand hundreds of dollars a year, the Green Party said.

Analysis of the cheapest normal power prices and the cheapest pre-paid power prices in Wellington shows that pre-paid customers are paying on average $542 more every year. Nationwide, pre-paid customers pay an extra $153 a year on average.*

“Too many pre-paid power customers are getting a bad deal,” Green Party energy spokesperson Gareth Hughes said.

“$542 extra a year on power could be the difference between new raincoats or shoes for the kids this winter or not.

“I’ve been tracking pre-paid power prices for years, and the gap between what pre-paid customers pay and what everyone else pays is still totally unfair in some parts of the country.

“In places like Northland and Invercargill, there’s almost no difference between pre-paid and normal power prices. It should be like that everywhere.

“We know that many of the people using pre-pay power are low-income families. Some are pressured onto pre-pay plans after having their power disconnected, and others go pre-pay because it helps them budget each week.

“About half of all pre-pay customers are forced to cut back on heating and a third have gone without power for more than 12 hours, according to Consumer NZ and Otago University research, with potentially really bad impacts on their families’ health in winter.

“In many parts of the country there’s only one or two pre-pay retailers, so there’s not enough competition to drive prices down.

“We need an industry code of conduct for pre-paid power to make sure people get a fair deal, to govern the rules around cutting power off, and we need to encourage greater regional competition," said Mr Hughes.

According to the Electricity Authority there were 43,560 pre-paid power customers in 2015, a significant increase from 30,804 the previous year.

*Analysis by the Parliamentary Library using the Consumer Powerswitch calculator.

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