Power “discounts”

[R650R]

One for the maths teachers and scientists on here.... re the power price discount debacle... using 2017 numbers

NZ generated 42911 Gigawatt hours for the year, 31% consumed by the residential market at average of 30c kilowatt hour. GST is charged at 13% (for some tetchy reason instead of 15). 60% of NZ pays their power bill on time and typically get close to 20% prompt payment/online/email bill discount.... if we lose that the govt gets about roughly $60 million extra in GST revenue.... follow the money always

No word about late payment penalties for property rates or income tax....

[pritch]

I never considered that a discount. It was always a built in late payment penalty.

[sidecar bob]

I understand rather than removing the prompt payment discount, everyone will be getting it, even if they are tardy payers.

[sidecar bob]

I never considered that a discount. It was always a built in late payment penalty.

Same, it was all in the wording.

[R650R]

“In what may prove one of the most controversial changes directly affecting consumers, the Government plans to phase out the requirement for electricity companies to sell plans that offer a low fixed daily charge and a higher variable charge for power used.

Industry sources said about 60 per cent of consumers were on such low-fixed charge tariffs, but the Government has ordered officials to develop proposals to phase them out.

Households that consume less than about 8000 kilowatt-hours of electricity a year can expect to lose out to varying degrees from that particular change, depending on how little power they consume.”

[R650R]

Current contract is bill is x amount but if you pay on time it’s less than x. They will not lower everyone’s bills. In fact some in the 60% bracket who pay on time might start paying later and those who already pay late have no incentive to pay bill at all.
Power companies will not wear a loss in revenue as they are a private profit making business. Prices will creep up to cover this social engineering

[mashman]

Well, we accepted that it was cool for bulk users to pay less for their electricity. Quite insane, but completely understandable :killingme

[neels]

So now instead of prompt payment discount, there will be a late payment charge, is this a win for the power companies? Or is it just Tomato/Tomatoe

My thinking is that if the rate per unit remains the same (and in many cases this is agreed for a set term), but the prompt payment discount is removed, it has just increased the majority of people's power bill by 20%. Those who don't pay by the due date will now pay an additional x% above what they are currently paying.

And as above, all of this with extra 15% GST for the government as a bonus for them.

Be careful what you wish for people, there will always be a way to turn what you think you want into a win for them......