As Kiwis battle rising electricity bills, campaigners call for change – Power to the People, part 1

NZ Herald

5 days ago

'We are suffering through this cold, and I just refuse to go back into more arrears with electricity. It really sucks, but what else can you do?'
Liz (who asked for her surname not to be used) is a solo mum living in Māngere East, Auckland. She used to face monthly power bills of $80 with Contact Energy, but when they started blowing out past $120, 'it was just like power bill after power bill'.
Liz got into arrears with Contact. Then, Contact cut her power and charged her a reconnection fee. Contact stopped charging disconnection for non-payment last August. But Liz had to borrow $700 from Work and Income to cover her arrears and reconnection.
"Me and my almost 9-year-old are suffering," says Liz, a single mum of Māngere East. Photo / Carson Bluck
In search of a better deal with another provider, Liz then switched to Mercury.
'And this is where I messed up.' She signed herself into a contract she did not realise locked her in for two years. The bills didn't get any cheaper, and she was stuck unless she paid a contract break fee.
'And then they also put on the late fees. I've gone into arrears with Mercury at least three times. I'm still currently in arrears with Mercury, and I have redirection [from benefit payments] set up of $95 a week, which is a lot.
'I'm currently sitting at $300 in arrears, still, with Mercury. Because $95 a week, it's bringing it down, but it's not clearing it. It brings it down, and then the next bill rolls in.'
And on her sole parent benefit, with money being redirected and still drowning in new bills, Liz found herself struggling to pay for other necessities such as food.
'So this is how I've been trying to manage over the years, which, honestly, has put me in so much debt and financial stress: I started using [buy now, pay later services] Zip and Afterpay. I would pay all my bills that I needed to pay, and then I would Zip or Afterpay an Uber Eats gift card to spend on groceries.
'Now keep in mind, I'm using this weekly because I need to make ends meet, right?
Single mum Liz has struggled to pay her power bills on multiple occasions, to the point of choosing between food and power. Photo / Carson Bluck
'So, that's a little bit of what my life looks like. We're currently freezing in our house. And when I say we're freezing, you know that cold where you wake up and you're breathing, but you can see you're breathing in cold air and your hair is cold? That's what it's like sleeping inside our house.'
Kim Dewhurst knows that feeling.
'I just stay in bed if it's too cold,' says the 69-year-old Upper Hutt pensioner.
'I wear jerseys, I wear socks, I wear long johns, I wear thermals – anything just to try and cut down on power.'
Dewhurst is a wheelchair user and full-time carer for her adult son, who has Autism Spectrum Disorder. She is with Nova Energy.
'My last power bill was quite high. It was a lot higher than I could budget for. It took my breath away, to be honest. My most recent power was $362.
'I hate it. I hate feeling obligated to beg for money, but I don't have a choice. I have to go to my kids. I am just sick of constantly being cold. Everybody said get a heat pump, so I did under the subsidy, and it just absolutely chews up the power.'
Energy hardship – what is it?
Liz and Kim are two of the more than 100,000 New Zealanders battling energy hardship, defined by the Ministry of Business, Innovation and Employment (MBIE) as 'when individuals, households and whānau are not able to obtain and afford adequate energy services to support their wellbeing in their home or kāinga'.
MBIE is due to release its second energy hardship report later this year. Its last report in 2022 showed up to 6% of households were in energy hardship and 110,000 households could not keep warm.
Consumer NZ does its own yearly and quarterly surveys probing energy poverty, and its last annual survey 'revealed some sobering insights', the watchdog's Powerswitch manager Paul Fuge told the Herald.
The 2025 annual energy survey found 20% of people have had difficulty paying their power bill in the past year. That was up from 18% last year.
More than one out of 10 people say their home is not as warm as they would like because of the cost of energy and cutting back on heating.
A majority, 56%, said they were concerned about the cost of their household's energy, a two-point increase from last year; 36% said the electricity market was working poorly for consumers like them; and 15% of people had overdue fees added to their bill because they couldn't pay on time.
Consumer's survey also found 6% of people had been disconnected due to unpaid bills sometime in the past, 8% have been denied as a customer by an energy provider due to a history of missed payments, 5% have had to switch to a pre-pay plan because of trouble paying bills, and 41% of people on pre-pay plans have had their electrcity or gas cut at some point.
Consumer NZ's Powerswitch manager, Paul Fuge, has outlined the seriousness of energy hardship in NZ.
Seven per cent of people have had to take out loans to pay bills, and 14% have had to borrow from family or friends to pay.
Consumer's latest quarterly sentiment survey in April showed 35% of people ranked the cost of energy as a top-three financial concern. It was 21% last April.
'These surveys were undertaken before the latest price rises,' said Fuge.
'Prices now are on average 11% higher than they were towards the end of last year.
'As shown in the survey results, many households were already struggling with high power prices, and the latest increases will only make this worse.'
Statistics New Zealand data for June showed power prices had jumped 10.4% in a year.
Much of that increase reflects a power price spike since April, when higher transmission charges fed into household power bills. MBIE's quarterly survey of domestic electricity prices, based on advertised electricity rates rather than final power bills, showed a 10.1% increase in the quarter to June compared with the previous quarter.
Much of recent power price increases reflect a power price spike in April, when higher transmission charges fed into household power bills. Photo / Transpower
Credit reporting agency Centrix's June Credit Indicator Report showed nearly 15,000 individual bill payers were in financial hardship overall.
The number of people behind on their bills in May was 485,000, an increase of 2000 from April.
Overall, 12.51% of the credit-active population is in arrears.
'It shouldn't be a privilege'
Advocacy group Common Grace says New Zealand needs to tackle energy hardship urgently because it has such a big impact on people's lives.
'We believe it shouldn't be a privilege to have power,' co-director Kate Day told the Herald.
'Electricity is an essential service, and it's something that everyone should be able to afford. But at a really basic level, that's not the reality in Aotearoa at the moment.
'We have tens of thousands of households cut off from this basic essential service because they can't afford to pay their bills. And at a base level, that's not okay.'
Kate Day, co-director of charity Common Grace, says access to electricity should not be a privilege. Photo / Common Grace
Popular anger over energy hardship has focused on the power companies charging the higher bills, especially the big four – Mercury, Contact, Genesis and Meridian – which collectively made profits of $2.85 billion last year or $7.8 million a day.
In the past few months, there have been increasing public calls for these former state-owned companies – nicknamed 'gentailers' because they generate electricity as well as sell it – to be broken up, since critics claim they have too much power to set prices.
And even if that doesn't happen, advocates such as Common Grace and Consumer argue that power companies should do more by
dropping disconnection fees
making sure their customers are on the cheapest possible rate
giving discounts to those in hardship
being more transparent about who they turn away for bad credit scores.
Last year, following a Power to the People campaign by the New Zealand Herald and Common Grace, Contact Energy dropped its disconnection fees.
This winter, after the abrupt price hikes felt by all New Zealanders since April, the Herald is revisiting the same issues – including a detailed analysis this week of power company responses to the questions above.
The head of the association representing electricity retailers and generators said they were working hard to tackle the issue.
Erganz chief executive Bridget Abernethy says retailers provide a range of support options for struggling households.
'No level of suffering or self-restricting of energy due to energy hardship is acceptable,' said Bridget Abernethy, chief executive of the Electricity Retailers' and Generators' Association of New Zealand (Erganz), which represents Contact Energy, Genesis Energy, Manawa Energy, Mercury, Meridian Energy, and Nova Energy.
'Erganz members understand that access to energy is a necessity and are committed to supporting customers in hardship.'
She said retailers provided a range of support options such as flexible payment plans, hardship funds, and referrals to services like EnergyMate, a coaching service to help households reduce their usage and bills.
Which companies offer hardship discounts?
Only a few power companies provide discounts for customers facing hardship, according to a survey conducted for this series by Common Grace.
Mercury said it excluded 135 households from the April 1 price increase and froze their prices. It supported about 2000 customers a month experiencing financial hardship. Globug, owned by Mercury, gave the same answer.
Contact has its 'HandUp programme', which it says gave individual payment options and discounted energy to customers in need. It said it also offered short-term energy credits for customers needing immediate relief, and full debt forgiveness to clear long-term, unmanageable debt.
'In 2024, this programme assisted 3500 households, and in the last year, almost $500k of support has been offered.'
Genesis, and now-defunct Frank, pointed to the Power Shout scheme, wherein 328,830 hours of free power were supplied to 4205 vulnerable customers.
Toast, a not-for-profit social retailer, has up to 300 customers who have been referred by its community partners specifically for discounted power.
'Toast provides them with all-year lower pricing than their previous retailer and also aims to discount their tariffs by 30% over winter months. They estimate these discounts will amount to $70,000 off standard Toast tariffs during winter 2025,' the company said.
The remaining companies that responded to the survey said they did not provide discounted power.
Meridian said, 'In our experience, discounts are not the way to help people transition out of energy hardship.'
Meridian has its Energy Wellbeing Programme. It provides customers with budgeting support, in-home assessments and tailored support to make their homes healthier, easier and cheaper to heat.
'In some cases, this involves providing items like curtains, insulation, or heat pumps. With more than 2500 households already assisted, we have found this to be a far more sustainable solution.'
Pulse did not offer discounts for hardship: 'Our priority is to keep electricity pricing as low as we can for all customers. This year, as an example, from 1 April we only flowed through changes in network services charges and did not change our energy rates.'
Nova said it did not offer discounts for hardship, preferring to work through its support teams.
Ecotricity did not offer discounted power, but was 'committed to supporting customers in hardship by offering flexible payment options, working closely with them to manage arrears and connecting them with external support services where appropriate'.
Electric Kiwi pointed to its daily free hour of power. Pre-pay service Wise said it did not offer discounted power to people in hardship because that was difficult to define.
Switch Utilities said it did not offer hardship discounts because the issue was 'wider than those in immediate hardship'.
A band-aid solution?
Wellington-based charity Fincap said the industry had made an effort, but it might be a band-aid solution.
'There has been a lot of effort from industry over the last five years to provide more assistance to people, and a greater recognition that electricity is an essential service,' said senior policy adviser Jake Lilley.
Fincap senior policy adviser Jake Lilley says there has been some movement from the industry to curb hardship, but more should be done. Photo / Fincap
'There's also been a strengthening of the consumer care obligations from what were previously guidelines from the regulator.
'But we still get back to an issue of if it's simply unaffordable, what happens?
'We're concerned that that's a bit of a band-aid for the affordability issues.
'We have our financial mentors telling us that a lot of people will go and get advances from work and income to keep the lights on.'
Fuge, from Consumer, said he believed energy providers were genuinely concerned about the impact of energy hardship,
'It's important to recognise that energy hardship is often a symptom of broader poverty, and it would be wrong to suggest that electricity retailers are the cause of that hardship. The underlying issue is systemic.'
And retailers' policies and schemes to help people were often 'disparate and inconsistent', Fuge said.
Kimberley O'Sullivan, University of Otago, says her research has shown more than a quarter million households were exposed to hardship. Photo / University of Otago
'It's a patchwork safety net with gaps –often a bit of a lottery as to who receives assistance and who doesn't.
'The most effective way to address energy hardship is to reduce electricity prices.'
University of Otago professor Kimberly O'Sullivan agreed, saying the real answer was changing the system.
'We know that over 360,000 households in NZ are exposed to energy hardship, and the level of support for those schemes pales in comparison to the dividends that electricity retail companies pay to their shareholders,' O'Sullivan said.
'It's time to think about who we want our electricity system to deliver for – and I'd prefer if it was delivering better for people in our communities and also our small and medium businesses.
'The true cost of home energy unaffordability isn't borne by electricity retail shareholders, but by households and the public health system.'
Abernethy, from Erganz, said energy hardship was a complex issue that couldn't be solved by the industry alone.
As she struggles to keep her home warm and herself and her son fed, Liz says she would not beg for help, but would ask for sympathy and understanding. Photo / Carson Bluck
'There are many intersecting drivers, such as low income, poor housing quality, and the multiple cost pressures households are juggling.'
However, O'Sullivan said her research on social retailer Toast showed its model worked well for regular customers and Energy Wellbeing Customers, who were referred by agencies after struggling to pay their bills.
'Energy Wellbeing customers report improved health and wellbeing, and describe how relieving electricity bill stress enables them to feel more comfortable and relaxed at home, and better connect with their family, friends and community,' O'Sullivan said.
'Regular customers also feel good about being able to help others in need while paying their electricity bills they would already be paying.'
Any solution can't come soon enough for Liz, who is at her wits' end trying to reduce her debt and pay the next power bill. (The Herald has asked Mercury what measures it has taken to assist her.)
'I don't want to sit here and beg for help,' Liz told the Herald.
All she needs, she says, is 'just a little bit of understanding and sympathy'.
Monday: As Kiwis battle rising electricity bills, campaigners call for change
Tuesday: Could you get a cheaper plan for electricity? Most companies won't tell
Wednesday: Major company moves to stop disconnecting customers in hardship
Thursday: Why our biggest power companies should be broken up (and why they shouldn't)