Electricity - and all that it involves - can be about as easy to understand as quantum field theory (say whaaat?). Whether you’re perplexed by generation, national grid intricacies, or the ins and outs of the electricity market, it’s one tricky wee beast!
So, here at Flick, we try to keep things clear and simple, especially when it comes to our pricing and the products that we’re offering. When we launched FIXIE back in September, we put together a list of FAQs to introduce you to the newest member of our Flick fam. But the current high spot prices have brought with them a new wave of FIXIE customers who’re making the most of price certainty and asking a whole new, awesome set of questions. Whoop! So, we’re dedicating this blog to those customers, and their epic quest for industry knowledge - welcome to FIXIE FAQs: 2.0.
FIXIE vs Freestyle - please explain.
Freestyle is the original spot price product (the first in NZ!), and one that we’re proud of. With Freestyle, you’ve got access to the wholesale electricity market, where the price of power - that’s the generation portion of your bill - changes every half hour. We simply pass on the wholesale costs of getting power to your home, and charge a separate, totally transparent Flick fee for us to act as your retailer. With access to spot prices, our Freestylin’ Flicksters ride the ups and downs of the market, and can choose to use power when it costs them less (saving an average of $500 in the past two years!). They’re not tied into a contract, so they can change products as and when they like. Freedom!
With FIXIE, all the costs that make up your power bill are passed on to you at wholesale prices, but your generation price remains fixed for six months at a time. So, as with Freestyle, you still get supply costs (metering and transmission charges, plus the Electricity Authority levy) at the wholesale rate, but your spot price is fixed and won’t move up or down with the market. And, if you’re in a network area where your price changes depending on the time or season, you’ll still be able to move energy use around to take advantage of lower price times. Winning!
Which is better - FIXIE or Freestyle?
As most Flicksters will know, right now we’re experiencing an unprecedented period of elevated spot prices in New Zealand. At the moment, Freestyle pricing - the price of electricity on the wholesale market - is significantly higher than the fixed prices that we’re offering customers on FIXIE.
If you’ve done a pricing estimate on our website, you might find that Freestyle prices come out cheaper, and that’s because our Freestyle bill and price estimates are based on historical, long-term average prices and usage, which don’t take into account the current market conditions. Freestyle pricing is typically lower than the fixed price you’ll get on FIXIE - however right now (October 2018), Freestyle pricing is significantly higher than FIXIE pricing, and that looks set to continue until early December. ‘Why’, you’ve been asking? Good question! You can read our market update blog here, and a message from our CEO, Steve O’Connor about the hard questions we’re asking of the electricity industry.
What’s a ‘fixed price’?
Another good question. We totally get that this can be a confusing term, and it’s often misinterpreted as a fixed dollar amount that’s paid each week. But, with FIXIE, the term ‘fixed price’ relates specifically to the generation part of your bill. It means you’re paying a fixed spot price for the electricity you use, rather than a spot price that can move up and down throughout the day (as with Freestyle).
And, although your generation price is fixed (for example, you might have locked in 8 cents per kWh for 6 months), it’s important to note that your power bills can still vary. That’s because the generation portion of your power bill is influenced by a combination of your fixed generation price, and how much power you use. In short, the more power you use (even at a fixed price), the higher your power bill will be.
Is the current fixed price higher than normal because of this pricing event?
Nope. Current market conditions don’t have any bearing on your current FIXIE prices because we’ve bought the electricity for you in advance - something known in the industry as ‘hedging’. It’s a practice where retailers purchase a specific amount of electricity from a generator at a fixed price, over a long period of time. So you’re paying us back for power we’ve already bought on your behalf. The generation price that you’re paying with FIXIE will stay the same for the entire 6-month contract (though other fees, such as charges from your network company (separate from Flick), may change).
‘Wholesale prices’ - what does that mean?
There are a few cogs in the wheel when it comes to your electricity bill, including your generation, transmission and distribution, metering, the Electricity Authority, and, of course, us (Flick!) as your retailer. With FIXIE, all the costs that make up your power bill are passed on to you at the wholesale rate, which means that whatever we pay for power is the same price we sell it on to you for. Fair pricing at it’s finest, reckon.
How does that work with hedged (rather than spot) pricing? Well, just like Freestyle, FIXIE incorporates our ever-important Flick values of honesty, transparency and fairness, so our numbers gurus have calculated a price for our customers that most fairly reflects the cost of fixing your generation for 6-months. We don’t make any money on the cost of your power - we simply pass on the costs of supply without any mark-up, and then charge a transparent Flick Fee and a separate fee to manage FIXIE.
The FIXIE Admin Fee is set at $0.0015 per kWh you use (0.15cents/kWh) and covers the cost of technical outgoings like trades and account handling - it isn’t calculated to make a profit. As with Freestyle, we make money on the Flick fee, which is 100% unbundled and clearly stated on your bill.
FIXIE’s prices - what does it cost?
Your FIXIE price depends on a couple of things - mainly which network you belong to (your Regional Pricing), your metering configuration (for example, Controlled or Uncontrolled), and your User Plan (Low User or Standard User). While the generation portion of your bill will be fixed for the duration of your 6-month contract, there may be differences between 6-month contracts, depending on what we’re able to buy hedges for. If you’re loving FIXIE life and want to rollover your contract, we’ll talk you through any price changes that may have occurred to help you make your decision!
Your network pricing plan (or tariff) depends on the type of meter at your home. A controlled meter means your network company can switch certain appliances in your home on and off - usually your hot water cylinder - for short periods of time when demand is high, and usually has lower charges (don’t worry - they won’t turn the lights off!). An uncontrolled meter can’t be switched off and on by your network company.
Regional Pricing - what’s this?
As we’ve talked about already, your power bill is made up of a number of charges from a number of companies, including generators, your local lines company, the company that provides the meter on your house, and your retailer (that’s us!). There’s also the Electricity Authority levy, and GST.
Each region has its own pricing schedule, which takes into account the various fees from the companies who service that area. Generally speaking, changes in pricing between regions are usually linked to the cost to move energy around the country. Often, too, local lines companies will offer different pricing at different times of the day, day of the week, or in different seasons, to encourage their local electricity consumers to use their power at off-peak times.
Making the switch - what’s involved?
The grass is looking a little greener (OK, a LOT greener) in the land of FIXIE at the moment, so we totally understand your reasons for making the switch from Freestyle. Thankfully, it’s as easy as heading to the ‘My Accounts’ tab of your dashboard, scrolling down to ‘Your Pricing Plan’ section and clicking on ‘Switch to Fixie’. Or, for those of you who prefer the app, a ‘Switch to FIXIE’ button now exists on the mobile app, under ‘Account’- it’s fresh off the press as of today (1 Nov)!
It may take a couple of days for the change to show up at your end, but your switch to FIXIE will be backdated to the Monday of the week that you made the move. It’s a measure we put in place last week in order to help our Flicksters through a tough pricing time. But we’ve decided it’s the fairest way of switching Flicksters between plans, so it’s going to be standard practice from here on in.
FIXIE billing - how does it work?
Our billing cycle is always 9 days behind, so if you’ve recently switched to FIXIE, keep in mind that you’ll have two Freestyle-priced bills before your FIXIE-priced usage kicks in.
And if your mobile app and dashboard still shows Freestyle (spot pricing) information, don’t stress - it may take a few days to update while the FIXIE switch is underway. These will change over within a week or so.
Still got FIXIE questions? Send us a DM! We’re continuing to work round the clock in order to answer Flickster queries, and we’re ALWAYS here if you need a chat. Happy FIXIE-ing!