The power balance

In the wake of a change in the way power bills are calculated, The Detail helps you understand the bottom line.Power prices are rising, and not just because of inflation. But it's hard to work out how to save money, if you can't understand your bill.A major change in the way power bills are being calculated will mean rising costs for huge numbers of New Zealand households. Those affected most will be smaller homes using less electricity. That's because the ratio of fixed daily charges to variable rates is being changed. The fixed daily charge is what everyone pays every day for the power poles and lines that bring electricity into the house - that's going up for low users, after it was deemed that high power users were paying more for distribution. The variable rate reflects how much power you're using. But working out the various rates and terms on your power bill isn't easy - and Consumer Advocacy Council member Jessica Wilson says there's no consistency across the industry.She talks to The Detail today about how to read and interpret a power bill, the traps in special offers, and what changes her group wants made to make it easier for us to work out what's happening. "At the moment there's no standard information they need to provide - it is a whole mishmash of different styles, different formats - even different words used to describe the same thing," she says.Bills do have some commonalities."Typically on the front page of the bill you'll see things like your account number, your address and billing details and obviously you'll also see how much you need to pay that month and when it's due," Wilson says."It's often when we look at that amount that we feel like we need a cup of tea and a lie-down!"On the second page of the bill, you will then get more detail about how that charge is made up." On top of that there's GST and the electricity authority levy - although that can be included in the variable rate.Sometimes there are also time-of-use charges, when you get cheaper electricity at off-peak times. For example, some companies have a 'free hour of power' promotion. Wilson says consumers need to be careful when considering these offers."First is the offer realistic - can you change your power use to the time of day or evening when the retailer is offering that discount? Secondly, how does it affect your standard rates for power use that the retailer's offering - are you for example paying a higher per kilowatt hour charge to compensate the retailer for offering you that free deal?" …Go to this episode on rnz.co.nz for more details