The electricity industry is a confusing one, with all its components, and the various plans, fees and prices which often differ between companies and areas of NZ. Yeesh.
We get lots of questions about User plans – what they are, what they do, and what the difference is between them – so in the interest of consumer awareness, we’re bringing you the enlightenment.
Distribution companies charge different metering rates for Low Users and Standard Users of electricity, to ensure there’s a fair spread of cost amongst users. User Plans and rates are set by the distribution companies, at thresholds based on kilowatt (kWh) usage per year. Households that use more than 8,000kWh each year should be on a Standard User plan, while households that use less than 8,000kWh over a year should be on a Low user plan. From Christchurch south, however, the threshold is 9,000kWh.
The Standard User plan:
Has a higher daily charge, but a lower charge per kWh used, so if you’re using lots of electricity, the lower unit charge balances things out. If you’re living North of Christchurch and using more than 8,000 units a year you’re generally better off on a Standard User plan. Further south, the threshold is 9,000 units a year. The sorts of situations we’d expect of Standard Users include households of more than two people who are home a lot and use a lot of electricity for heating and hot water, or large flats. Heating methods more than anything will contribute to higher usage. Heaters used constantly, like panel or oil heaters, underfloor heating, uninsulated hot water cylinders, and heated swimming/spa pools all contribute to higher usage.
The Low User plan:
A Low User plan is generally suited to people using less electricity than average. It has a lower daily charge but a higher kWh rate, which means that if you don’t use much electricity you’ll pay less than you would on a Standard User plan. If you’re living North of Christchurch and are using 8,000 units or less a year you’re classed as a low user. Once again, further south the threshold increases to 9,000 units per year. Low users tend to be households of one or two people living in well insulated, energy efficient houses and/or homes with gas heating or hot water.
Does it matter if I’m on the wrong user plan?
If a household uses significantly more or less electricity than the plan that it’s on is designed for, they can very easily end up spending too much money on power. The greater the gap between their usage and the threshold between Standard and Low User, the more they’ll be paying unnecessarily.
Changes to your household can easily affect how much electricity you use, and therefore which plan is best suited to your household. The most common lifestyle changes we’ve seen that can influence your user plan include people moving in with parents or grandparents, having a baby and moving house. Proactive retailers (like us!) should be checking whether or not their customers are on the right plan for their situation. But many don’t, and sometimes plans remain in place for years despite all of life’s changes. Understandably, people rarely think to update their plan when their family circumstances change.
How can I tell what plan I’m on?
Check your bill. If your daily charge is about $0.60 per day then you’re on a Low User plan. If it’s higher, you’re on a Standard User plan.
Alternatively, head to the ‘Usage data’ tab inside your dashboard and select a start date and end date to cover the last year. Once you’ve downloaded your data, you should be able to highlight the column containing your usage, and find the total amount you’ve used right down the bottom.
OK, I’m on the wrong plan – what should I do?
Call us on 0800 435 425 and we’ll get it sorted. We’ll check your consumption over the whole year and go from there! It’s important to note, too, that you can only change plans once a year at no charge - after that, additional changes will cost you money (regardless of which energy provider you’re with).
What’s this I’ve heard about Low User plans being phased out?
The Government is in the process of phasing out the distinction between Low User and Standard User for each pricing plan, so that everyone’s in the same category. We’ve got a whole other blog on that to help you wrap your head around it – head over for a read!