Consumer Reports and Powerswitch have just issued a media release with this blockbuster headline …
Shocking stuff: consumers in lower income areas paying more for power
That aroused BayBuzz attention, just as it was intended to do!
But while the chart provided made clear the inequities faced by the power consumers of Kerikeri, Westport, Balclutha and Gisborne, it left us in the dark as to the situation in Hawke’s Bay.
So we asked Consumer Report for the Hawke’s Bay result, receiving this response: “…upon analysing the data for the lines company Unison (Hawke’s Bay), the prices paid for electricity are very similar to the national average and presently does not appear to have a major price disparity.”
Which isn’t to say that lower income households in Hawke’s Bay do not pay a greater percentage of their incomes for electricity than those well-off.
Here are some of the worst disparity examples around the country:
- The prices in Kerikeri (currently the highest in New Zealand) are about 40% higher than they are for a similar household down the road in Auckland where median incomes are about 25% higher.
- Prices in Masterton are 15% higher than they are just over the hill in Wellington.
- The price in Westport, which has lower-than-average incomes, is close to 40% higher than in Christchurch, which on average has higher incomes.
The reasons for cost disparity like these are not mysterious. As Consumer Report indicates:
“Regions that have higher prices tend to have lower population density, are further away from power stations, or have few large commercial electricity users. With a typical power bill, about 40% of the payment is electricity lines charges – which is the cost of the infrastructure required to get electricity from the power station to your home – so there are fewer households and businesses to spread these costs over. Unfortunately, many of the consumers in these areas also have lower-than-average incomes.”
The analysis also showed – no surprise here – that areas with less consumer choice of supplier had higher prices, even if they had more people to carry the infrastructure costs. Tauranga was cited as an example, with Trustpower supplying 60% of households. There prices are 11% higher than the national average.