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Pricing Reform

Pricing Reform

With the emergence of new technologies – solar panels, electric vehicles and battery panels for example – consumers have more choice and control around how they use energy. 

While the opportunities presented by these technologies are exciting, the way distribution prices are calculated needs to change. If they don’t, electricity bills for ordinary New Zealanders are likely to increase further over the long-term.

Over the next couple of years, Unison, in consultation with retailers and consumers, will be looking at the options available to set more fair and efficient pricing for households.

In April 2017 we prepared our roadmap to pricing reform to give consumers and the Electricity Authority an indication of Unison’s intended approach to pricing reform, the need for reform and our process for change.

Unison’s move towards service-based, cost reflective prices

Unison’s goal with pricing reform is to introduce distribution prices that are more reflective of actual network costs and the services that consumers receive.

Currently most pricing is based on how much electricity consumers use. It does not consider the time at which consumers use electricity or the capacity required for each consumer when demand on the network is greatest – usually cold, wet, winter evenings. This is where the cost of providing a lines service comes in.

Unison has already made some progress in introducing more cost-reflective, service-based price offerings:

1. Solar pricing: In April 2016, Unison introduced a solar/distributed generation price category to reflect the different usage profile of solar consumers.

2. Optional time-of-use (TOU) pricing: In April 2017, Unison improved its TOU offering by raising the difference between off-peak and peak prices and extended eligibility of this price category for consumers installing solar.

Next Steps

Despite these changes, most residential consumers remain on legacy prices. Over the next year, we will continue to consult with consumers and retailers to explore the options and appetite for change.

Activity Timeframe
Develop specific pricing options and consultation materials October 2019 to June 2020
Undertake customer consultation February 2020 to September 2020
Develop preferred pricing option February 2020 to September 2020
Make decisions on implementation timetable, including need for small-scale trials June 2020 to October 2020

As the future of electricity pricing is decided, it is important for electricity consumers to have their say and share their views. If you are interested in receiving information and/or taking part in research and focus groups, please email [email protected]