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Energy prices rising despite retailers’ huge profits

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Energy prices are rising despite some big retailers increasing profits, and Consumer NZ is urging Kiwis to do something about it.

For example, Genesis customers can expect to see their gas bills increase by an average of about 11% this month.

That’s despite Genesis reporting a 600% increase in annual profits – but they’re not alone.

Gemma Rasmussen of Consumer NZ told Breakfast this morning that “these big retailers have the opportunity to sharpen their pencils”.

“It’s a significant price hike and I guess the other thing we know is that looking at smaller retailers, there are actually cheaper deals out there,” she said. “The good news in all of this is that there is actually something consumers can do about it.

“And that’s change…and when people change more, it really forces retailers to look at their prices and fine-tune them, but we also hope they’ll be a little more proactive about their price.”

A change to low-usage plans is expected to cause fixed fee prices to skyrocket.

Rasmussen confirmed that this is an industry-wide problem, but pointed out that smaller players are more competitive at the moment.

“I think what the energy industry knows is that people are really reluctant to change. Electricity bills are confusing, there’s fear that the power will go out if they change, and there so there’s not as much movement in the market and people are a bit sticky.

“As a product, no matter who you’re with, power is power,” she said.

Genesis’ response

In a statement, Genesis said the price increases reflect a range of costs, including fuel price, carbon charges, power line charges and costs associated with delivering gas to customers.

“All of these costs are increasing significantly and while we will need to continue to absorb some of these costs, we will need to pass on some of them,” the statement said.

Rasmussen agreed that the electricity market is incredibly complex.

“And statements like that can be made, and consumers don’t really know what that means.

“But I think ultimately we have to look at earnings and say, is it reasonable to raise prices again when your earnings levels are this high?” Rasmussen asked. “Absolutely there are costs and businesses should make a profit, but the question has to be asked, what is a reasonable level and how much should New Zealanders pay?”

“An essential service”

Energy poverty researcher Kimberley O’Sullivan told Breakfast that Kiwis are making sacrifices because of rising prices.

“One of the things we’re concerned about is not just people who will end up going offline because of price hikes like this, but those people who may be sitting at home without the lights on. because they’re worried about what’s going to happen if they get that big bill and get disconnected,” she said.

“It’s an essential service. That’s one of the problems with the market-based system is that we have a market that wants to deliver shareholder benefits for something that people can’t live without. .”

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