MARKET UPDATES
How the Energy Sector Works in NZ and What This Means for Businesses
Dmitry Gafiyatulin, Director of Reliance Utilities, gives an update about the current situation of the energy market in New Zealand and explains the reasoning behind the increase in electricity and gas prices. He recommends that NOW is the best time to review, renegotiate and refix the pricing of your current gas and electricity contracts. He forewarns that it is unlikely you will get the same pricing as the past year or two, but it is the best safeguard against future price increases.
The reason for increased electricity pricing comes down to a limited supply. There has been less hydro energy production due to the low water levels in the lakes of the South Island.
The increase in gas prices is due to the fact that the government is still not releasing any gas exploration permits, which means the gas retailers cannot explore any new gas fields, limiting the production of gas. This has resulted in 5 retailers withdrawing from the energy comparison website Powerswitch, who are responsible for 70% of the switches. This effectively means there is less competition, and gas prices are likely to increase.
Many retailers are not accepting new clients for gas, and one retailer is actively encouraging their clients to leave and find a different gas retailer. The gas retailers who are accepting new clients are offering double or triple the average pricing rates! For example, in Auckland, the average price per kilowatt-hour has been 5-6 Cents, now prices are being seen to increase to 14-15 Cents per kilowatt-hour. This means that if you are a large gas user in your business, your gas bill will become double or triple the current amount.
By utilising the service of Reliance Utilities, customers effectively come together with thousands of others like themselves - Improving buyer power and creating the ability to receive better prices. As a service, Reliance Utilities harnesses this buying power and can effectively negotiate better deals with these power suppliers.
With years of experience and market knowledge, Reliance Utilities simply knows what works and what offers work better than others. A huge risk lies in trying to do this yourself. Many customers don’t understand the true importance of the terms and conditions when making a deal with a power supplier. We believe this is just as important as the price. Due to these terms and conditions being very material heavy (upwards of 80 pages), most people simply don’t have time to read through them, and this results in them making uninformed decisions - potentially losing more money than they need to.
All too often we see customers get locked into contracts that they have to pay for in the long run. When joining Reliance Utilities, you don’t need to worry about this. It’s part of our service to fully understand every term and condition from all of the power suppliers on the NZ market and then come back to you with the best deal. Not only does this save you money, but it saves you a vast amount of time and stress.
Our services have been proven, and we have seen average cost savings for customers to range from 5-20%, depending on a variety of factors such as energy consumption and location.
If you’re interested in finding out how much money you could save yourself
