Householders ponder electricity gamble
About a third of Christchurch's electricity consumers are being offered a punt.
Genesis Energy is offering Christchurch customers and others in "select" parts of the country a two-year locked-in price which is almost 10 per cent higher than what they are paying now.
Those who do not accept the large increase will find later that Genesis increases the price anyway, but it is not known by how much at this stage.
Genesis has about 50,000 customers in Christchurch. The last time Genesis raised prices in Christchurch was only six months ago.
Customers do not have to accept the proposed increase. If Genesis raises its price by even more sometime this year, customers can choose to switch to another retailer.
Genesis spokesman Richard Gordon acknowledged that it was a very competitive market.
Tens of thousands of customers - or one in five - shop around and switch each month, the highest rate in two years, a report showed late last year.
As a result, power companies have been offering all sorts of deals in the last few months, including Genesis offering a 20 per cent discount on a two-year fixed deal if customers bought both gas and electricity from it.
Gordon said the locked-in price offer was like taking a fixed mortgage and locking in an interest rate.
He said much of the increase was due to lines company Orion being allowed by the Commerce Commission to substantially increase its prices. Genesis was passing that on in its prices.
But he could not say how much of Genesis' increase was passing on Orion's increase and how much was its own. Orion's higher prices start being charged on April 1.
"There may be a small amount in there for our own costs that are also increasing," Gordon admitted.
The biggest part of the power bill is wholesale electricity charges and they are low.
Genesis' competitor, Mighty River Power, has committed to freezing its energy prices, which make up about 60 per cent of a bill, until April next year, but it will pass on lines company and Transpower increases.
Gordon said Genesis customers in Christchurch who did not accept the lock-in deal now could expect "at some stage" to have their prices increased.