Flicking the switch to save money on your power bill

Jeanie Stewart has saved over a $1000 by switching to a "spot price" electricity contract for her home.
LAWRENCE SMITH/FAIRFAX NZ

Jeanie Stewart has saved over a $1000 by switching to a "spot price" electricity contract for her home.

Jeanie Stewart decided enough was enough when an $800 monthly power bill landed on her doormat last year.

So she went onto the Powerswitch website, which lets people check if they are getting the cheapest power they could.

Stewart says: "The cost of my bills was horrendous at certain times of year. I run a slightly larger house than is typical. It's double level, has a granny flat and a pool."

Flick Electric chief executive Steve O'Connor is fighting for the company to get noticed.
ROSS GIBLIN/STUFF

Flick Electric chief executive Steve O'Connor is fighting for the company to get noticed.

"It finally made me think that I had to do something about it."

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* Cut your power bill by using the right type of heating

Powerswitch, which is run by Consumer, showed electricity industry newbie Flick Electric came out cheapest.

Flick's only been going for two years, and runs on a very different model to other electricity providers.

Traditionally, providers created bundled power plans, where homeowners pay a price, never knowing what the electricity retailer is paying for the power it sells them.

Flick's different. It charges fees to customers, but when it comes to the power, it just passes on the wholesale price.

The savings come because the wholesale price is way below the prices homeowners are usually charged for power by other retailers, though the spot price can bounce around bringing some risk. The Electricity Authority's website has a useful guide to "spot-price" contracts.

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The advantage of buying at the spot price is that when they are low, power-users pay substantially less for electricity than they would on a traditional retail contract where the price is the same all the time.

But, it says: "If spot prices increase above the flat rates charged by retailers, you may pay substantially more than you would on a traditional retail contract."

Power providers protect themselves from spot price spikes by setting their prices higher than they expect the average to be.

Savings on spot price contracts can also also come as a result of homeowners being able to keep an eye on the spot price using the Flick online "dashboard". This lets them work out when is cheapest to run their appliances.

Stewart says she can now see exactly what it saves to run the pool pump in the wee small hours, or have the dishwasher run off-peak.

"I was able to see for the first time what power I was using, at what time of the day, and what it was costing me," she says.

Part of Flick's appeal is that on its bills, it tells customers how much they have saved since switching from the plan they were on with a traditional power provider.

Stewart is boss of Mirrorwave, a company which helps other companies find out what their customers really think of them. That means she knows a lot about the failings of companies in communicating with the people they rely on for their income.

Stewart's last bill claimed savings of $1033.70 since she switched around August last year.

Nationwide, there are some significant savings on offer.

The Electricity Authority estimates $280m in savings are available in the electricity retail market if all households were to switch to the best priced options.

Flick's founder Steve O'Connor says research shows around 95 per cent of domestic power users are entirely "disengaged" with their power providers.They see all power providers as being similar, and don't know they have options.

The company has around 10,700 customers.

Since launch two year's ago, it now claims to have saved more than $2m for people who switched to it, with figures rising by $85,000 a week.

The average saving per customer, compared to what they would have paid on their old power contracts, was $412.

Flick's Rebecca Read said: "We have a small number of customers who have saved more than $1500 since joining us.

"Savings are best over winter and spring because the spot price is typically lower through this part of the year – when there's lots of wind and rain, and abundant supply, prices tend to drop. But because consumption is typically lower in Summer and Autumn, when prices are slightly higher, our customers tend to have very steady bills over the year."

HOW TO SAVE ON POWER

*Government-run Energywise website helps identify where power savings can be made at home including how to check if your home is properly insulated and how to buy energy-efficient appliances.

*Check out the Ministry of Social Development's ten-tip guide to cutting your power bill.

*If you are in rented property, talk to your landlord about insulation and draft-proofing. Consider owning your own energy-efficient heaters, which you can take with you when you move.

*Consumer's Powerswitch website can help you work out if your power retailer is charging you too much. Have your last few months of bills to hand when using its calculator.

*Switch to low-energy use LED lightbulbs.

*Make savings by changing habits, including being mindful of turning off lights when you leave a room, minimising appliance usage and taking showers rather than have baths.

 

 - Stuff

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