Electricity bills are certain to rise next year as the higher costs of generating and distributing power are passed to all consumers, but especially for retirees.

The Commerce Commission this week said that grid operator Transpower and most electricity distribution companies can earn $17.4 billion in revenues in the period from April 2025 to March 2030.

“This represents an increase of nearly 50 percent compared to the current five-year regulatory period which ends in March next year,” said Grey Power President Gayle Chambers. The $5.5 billion uplift must be recovered from consumers, as there is no other current mechanism for lines companies to reclaim this money.

“This massive increase in lines charges comes as seniors struggle to adjust to the end of low-user fixed charges, which restricted the fixed daily charge for low users to 30 cents a day. The daily cap is now $1.20 and will rise again in April, to $1.50 a day.

“Eventually the cap will be removed, meaning that in 2027 retailers will likely put all their residential customers – low users and high users - on a similar daily charge, typically about $2 to $2.50 a day.

“In other words what used to be a $4.50 a month fixed charge on a low-user’s bill, will increase to about $70 a month. And that’s not the final bill, which also includes the variable cost of power, levies, and GST.

“Adding to the pain for retirees living on fixed incomes, there are other significant bill pressures on the way.

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“Wholesale power prices have been on an upward trajectory since 2018. From levels at about seven cents per kilowatt hours in 2018, hedged wholesale power was 18 cents per kW hr in September 2024. In real terms, this is a doubling in the cost of generation, an expense which is passed by retailers to their customers.

“With increases in power bills, Grey Power will continue to advocate strongly for all seniors. Electricity is a basic human right. It must remain affordable for our vulnerable seniors, either through income support such as an enhanced winter energy payment, improvements to the capricious wholesale electricity market, or incentives for regulated lines companies to invest more of their owners’ money in upgrades – through debt and capital - rather than send the bill straight to customers.

“Grey Power would also strongly urge the commission to drive cost efficiencies into lines businesses and Transpower. The current mechanisms for encouraging savings through cost-cutting are not working, so monopolies are given a pot of money to spend with little incentive to lower costs through efficiency gains.

“We know the importance of reliable and resilient electricity, and it’s not free, but the cost pressures are piling on our members. Grey Power will be raising these points at upcoming stakeholder forums that’s its invited to, and in its next round of meetings with Government ministers,” Mrs Chambers said.

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