Hundreds of thousands struggling to pay for electricity - report (2025)

An energy hardship expert says there are likely to be hundreds of thousands more people struggling to afford electricity than what is estimated by the government.

A report from the Ministry of Business, Innovation and Employment (MBIE), on energy hardship measures for the year ending June 2022, found 6 percent of households could not afford to keep their home adequately warm.

Dr Kimberley O'Sullivan, a senior research fellow in the Department of Public Health at Te Whare Wānanga o Otāgo ki Pōneke, said that was just the tip of the iceberg.

Analysis using that same data set showed at least 18 percent of households, about 360,000 across the country, were unable to pay for the electricity they needed.

O'Sullivan said the size of the problem had not decreased in recent years, given the cost of living pressures.

MBIE defines energy hardship as the situation when individuals, households and whānau are not able to obtain and afford adequate energy services to support their wellbeing in their home or kāinga.

In January, Consumer NZ reported an estimated 40,000 households had their power disconnected in the past year because they could not pay their power bill.

O'Sullivan said there were many more people who received a notice and borrowed money to pay a bill or make a payment arrangement with their energy retailer.

"There are a lot of people who are in quite significant hardship before they are actually disconnected."

People responded to energy hardship in different ways; some people would run up an electricity debt to keep themselves warm, while others would drastically limit their use, she said.

"Other people will sit there with basically nothing but the lights on, they will be freezing at home, they will be limiting their use of hot water and living in a really miserable situation, but they might not ever get a disconnection notice, because they are trying to manage this problem in really different ways."

Renters were at higher risk of experiencing energy hardship because they often lived in poorer quality houses which were difficult to heat.

"New Zealand still had remarkably low building quality standards, what the Building Code specifies, even for new builds, is homes that are still going to need heating now and into the future so that's part of our problem, we have built ourselves into this.

"Then we have the cost of electricity as well and the fact we mostly rely on electric heating."

Common Grace Aotearoa has started a petition calling on the Electricity Authority to ban disconnection and reconnection fees.

Co-director Kate Day said the fees disproportionately affected the poorest customers.

"We think a fee that hits people when they have already shown they are not able to pay for electricity is inherently unreasonable and should be banned."

Day said there were voluntary guidelines stating that fees should be reasonable, but there was no definition of what that meant. The current charges varied between companies, some did not impose a fee, while others charged up to $300 for disconnecting and reconnecting power.

The campaign, which is supported by 16 organisations including the Salvation Army, Child Poverty Action Group and Consumer NZ, also wants to ensure retailers' prepay prices are no more expensive than their cheapest plan.

Day said it wanted power companies to do the right thing for customers in hardship, and not to impose disconnection or reconnection fees.

Copyright © 2024, Radio New Zealand

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