The Blog

Dry Winter 2017: so, how bad was it?

Hey Dry Winter Survivors,

First of all, a big thumbs up for making it through the past couple of months! High spot prices, caused by the Dry Winter and heavy demand for electricity, were an unpleasant shock for many Flicksters on our Freestyle (spot price) plan - after all, they’re a stark contrast to the super low spot prices we’ve become accustomed to. But we’re very happy to say that 2017’s Dry Winter is finally over, and spot prices are back down under 9 cents per kWh again - Flick yeah!

If you’ve been with us a while, you might recall a blog where Chief Flickster, Steve, compared the spot price of electricity to the price of strawberries. Well, this year it’s all about avocados, but the message is the same: just like the fluctuating price of avocados throughout the year ($8 avocados, anyone?!), the spot price of electricity moves up and down, reflecting the availability of electricity on the wholesale market.

This really came into play the winter of 2017, when hydro-generation was low, but demand for power was high. To make matters worse, it was the first year that Flicksters have encountered a Dry Winter: historically, they occur every four to five years, and the last (in 2012) happened before Flick hit the scene. So it really was baptism by fire - for all of us.

Now that spot prices are trending back down, we’ve had a few questions about the overall impact of this year’s Dry Winter, and what it meant for Flicksters. So let’s look at the facts.

How long did this Dry Winter last?

Dry conditions hung around a bit longer than usual this time round. In the past, Dry Winters have lasted between 3 and 8 weeks, but this year those conditions lingered for around 9 weeks.

What did the Dry Winter do to spot prices?

Spot prices climbed to an average 13.88 cents per kWh this winter (ouch!). Prior to the onset of Dry Winter, Flicksters on our Freestyle pricing plan reaped the rewards of the wholesale market with an average spot price of 6 cents per kWh for the preceding 12 months. To put this into perspective, we estimate that the spot price needs to hit around 11 cents or more before you’ll start paying more with Flick than you would with a traditional, fixed-rate retailer. That’s probably why before Dry Winter, Flick delivered 102 consecutive weeks of savings to our Freestylin’ Flicksters.

The following chart will show you how spot prices peaked over Dry Winter, then came back down just as quickly, with an average price of 6.7 cents forecast by the experts for October.

Average spot price paid

How did the Dry Winter impact Flicksters’ power bills?

Over the Dry Winter period, Flicksters spent an average of $82.56 more than they would have paid with their old retailer. When you consider that over the past year (up until October 2017, which includes the Dry Winter period) Flick customers on our spot price plan, Freestyle, saved an average $398.81 compared with their previous retailer, for most Flicksters, long-term savings have far outweighed the unusual Dry Winter bills.

It was really easy to place full blame on Dry Winter prices for higher bills, but these were exacerbated by an increase in usage over the colder months. We use more electricity over winter, so we can naturally expect winter power bills to be higher than normal. The Usage tab on your Flick dashboard is a data dreamworld!

How did Flick customers get through this year’s Dry Winter?

When the Dry Winter hit, we knew some bills would be hard to stomach for many of our Flicksters, so we chose to be totally upfront about what spot prices were doing, and how long we expected them to last. Our goal was to carry on being our usual transparent, honest and informative selves, and to make sure our Flicksters remained top priority.

Many Flicksters were able to get through by keeping a close eye on their app and Flick dashboard to respond to high (and low!) price time periods - our blog ‘What to do in a Price Spike’ gave some great tips on managing high price events. But we appreciate that this wasn’t always possible for everyone. During a cold winter, it’s critical to keep warm and comfortable, especially when there are kids in the house, and we worked with many of our customers who found themselves struggling to cover their bills.

Because we’ve got a policy of no fixed term contracts and no break fees with our spot price plan - and because we understand that Dry Winters can be tough - we made it as easy as possible for customers to leave us if they needed to. No guilt-trips here! And now, with low spot prices back in the mix, it’s exciting to see that lots of Flicksters who left us during Dry Winter have returned. Such #CleverFlickers!

How did Dry Winter affect your business?

We were proud to be NZ’s fastest growing retailer in 2016, and we retained that momentum leading up to the colder months. But when Dry Winter hit, we made a conscious choice to ensure Kiwis who applied to join Flick were made fully aware of the situation, and offered to suspend their application until prices were better. Yep, this meant our growth slowed, but the majority of those applicants are now happy little Flicksters, having been switched over in August.

The success of our business is, naturally, hugely important to us. But what spins our wheels is a desire to deliver NZ’s Fairest Power Deal to all Kiwis. So we’re happy for our targets to take a hit in favour of looking after our Flicksters.

What next?

We’re lucky to have a bunch of super smart, savvy Kiwis signed up to Flick, and they gave us some pure gold feedback over Dry Winter. We were able to implement many suggestions within a few days or weeks, like introducing forecast price notifications to the app, so you’d know not to put the washing on for an hour if the price was forecast to spike in 30 minutes. We introduced a long term savings chart on the Bill tab of your app, to show you how your savings were tracking over time. And we also calculated the average running costs of some common peak time appliances so you could make smart choices about what to use, and when.

And there are bigger development projects now in the works. Thank you for reaching out to us with all your thoughts on what would make #FlickLife easier for you during sustained high price events. We listened and we heard you - watch this space!

So, is that the end of the Dry Winter?

Yip, that’s it. Dry Winter 2017 is officially done and dusted, and flick are we happy to see the back of it!

But let’s take a moment to appreciate the silver lining here folks: Flicksters all around the country are now clued up on the influence of weather conditions on our hydro storage, the wholesale electricity market and our electricity generation. Because it’s about more than just high power bills.

And we know that when sustained, high price events like these happen, we can get through it… and with over 20,000 Flicksters alongside us. Flick yeah!

Learn what this year’s Dry Winter was all about:

Flick’s guide to the Dry Winter