Dunedin power prices among NZ's lowest

Dunedin domestic power users enjoy some of the cheapest power in New Zealand, a government price survey concludes.

And if you are prepared to go online, it is even cheaper.

The Ministry of Economic Development's latest quarterly power report reveals the average domestic user in Dunedin spent $1641 a year on power.

The total was extrapolated from the quarter to February 15.

It also revealed Dunedin customers had access to the cheapest single power price available in New Zealand in the February quarter, from online retailer Powershop, a wholly-owned subsidiary of Meridian Energy.

Powershop charged 18.34c a kilowatt hour (KWh) in the February quarter, compared with the New Zealand average of 23.85c.

Powershop chief executive Ari Sargent said a major reason Dunedin's prices were cheaper was lines company Aurora Energy's low charges.

In the February quarter, Aurora's line charge of 6.42c a kilowatt hour was significantly less than the national average, 8.96c.

However, the Dunedin market was no more competitive than other cities or districts, he said.

Evidence the market was not particularly competitive was the spread between retailers' prices in Dunedin, ranging from Powershop's 18.34c to Contact Energy's 22.61c a kilowatt hour.

Contact Energy and TrustPower had had a "cosy" hold on Dunedin's domestic power market until Powershop entered a little more than a year ago, Mr Sargent said.

With just over 1000 customers, it had a slow start gaining traction in Dunedin but had picked up in the past two months.

Powershop was popular with students, who were comfortable with the fact it was online.

TrustPower spokesman Graeme Purches said Powershop's low prices were either a "loss leader" or the online retailer had its sums wrong.

TrustPower had studied Powershop's prices and could not see how the retailer could profitably offer the rates.

He also took issue with the quarterly report, saying the ministry did not factor in all the complexities of power companies' pricing.

Contact Energy spokeswoman Louise Griffin accepted the figures' accuracy, noting Dunedin's electricity market was "intensely competitive".

Contact has 50% of Dunedin's domestic power users.

Ms Griffin said Contact offered customers fringe benefits such as Flybuys points which might not be counted in the report.

Aurora Energy chairman Ray Polson was pleased the company's low lines rate helped keep a lid on Dunedin power prices.

Also, the Dunedin City Council-owned entity returned its profits to ratepayers.

Lines companies were heavily regulated, so their prices were controlled, yet some companies hiked their rates arguing the need to improve infrastructure.

However, Aurora managed to upgrade infrastructure while keeping prices down, he said.

Ministry of Economic Development energy information and modelling manager Simon Lawrence said the figures included GST and prompt-payment discounts, but not loyalty programmes, direct debit and electronic payment discounts.

It was important to note the survey was based on the average user, which meant families and other "high users" probably paid much more.

However, the survey showed the benefit of shopping around.

"It's a good idea for customers to regularly check whether they are with the cheapest retailer.

"Our latest survey shows that Powershop is a good option for many people," he said.

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