During winter many Kiwi households see their power bills spike, due to increased heating and hot-water costs. However this year, electricity customers across the board will see their bills rise due to a triple-whammy of price increases. Canstar looks at the three reasons electricity bills are set to rise, and what steps power consumers can take to reduce their electricity bills.
Why are electricity prices rising
Just in time for winter, and peak energy consumption in the home, three factors are coming into play that, together, will push up the price of electricity for all power consumers. The three factors are the:
- Rise in transmission costs of electricity to households
- Scrapping of the low-user electricity tariff
- Rise in the wholesale price of electricity
Below we look at each of the reasons for the price rises in more detail, and how to switch power providers and save money.
Power transmission costs increases
When you pay your electricity bill, only about a third (32%) of the cost is for the power you consume, the biggest slice (37.5%) goes towards the transmission costs involved with getting the power from where it’s generated into your home.
The money goes to Transpower, which is responsible for the national power grid, and local lines companies, which ensure the power gets from the grid into your home.
Transmission and line costs are regulated by the Commerce Commission. And due to general inflation and rising levels of investment in the power network, the lines companies have been given permission to raise their prices over the next five years.
Lines charges vary depending on where you live, but over the next year, the average monthly increases power customers can expect range from $11.50 to $28.75 per month.
Here's a breakdown of the price increases you can expect from your local lines company:
Average price increases per month, from April 2025 - April 2026 | |||
$11.50 | $17.25 | $23 | $28.75 |
Electricity Invercargill | EA Networks | OtagoNet | Alpine Energy |
And, unfortunately, the price hikes are not just limited to the first year of the five-year review period. Over the next four years, the Commerce Commission has approved further additional annual price hikes of, on average, between $5.75 and $17.25 per month:
Average price increases per month, from April 2026 - April 2030 | ||
$5.75 | $11.50 | $17.25 |
Alpine Energy | EA Networks | Firstlight Network |
Scrapping of the low-user electricity tariff
Power bills for many people are also increasing due to the scrapping of the low-user electricity tariff, which you can read about in more detail here.
The five-year phase-out is designed to make the electricity market fairer. But it means that low-user power consumers are facing annual price hikes due to higher daily charges: roughly an extra 0.35c per day, which works out to $126 per year.
The annual price rises kick in each April 1, and this year marks the fourth year of the phase-out, so there’s still one more round of price hikes to go, in 2026.
Rise in the wholesale price of electricity
Since the beginning of the year, wholesale power prices have risen steeply. While not at the crazy prices the market experienced in the middle of 2024, they are still elevated compared to the past five-year average.
However, while we can hope that wholesale power prices will ease over the next few months, there’s no escaping the increase in transmission costs and the end of the low-user tariff.
How to save money on your electricity bill
If you’re facing higher power prices, there are steps you can take to reduce your monthly bill:
1. Check your current contract
Look to see if you’re on an open contract. If you’re not tied to a fixed term, you’re free to start looking around for a cheaper power deal.
2. Check your power plan to see whether you’re a low user or standard user
There’s only one round of price hikes to go before the low-user tariff is scrapped, but there are still savings available for low-power users.
3. Check your peak power-usage times
Check when you’re using most of your electricity. You can do this through your provider’s website or app. Do you use a lot of off-peak power, at night and at weekends, or are you a peak power user? And, more importantly, can you move your usage times?
Exact times differ between providers but, generally speaking, peak times are Monday to Friday, 7am-11am and 5pm-9pm.
Knowing when you use most of your power is important, because many electricity providers offer different rates at different times of the day. For example, here are the power-price bands offered by one Kiwi provider:
- Peak: $0.4199 per kWh
- Off-peak: $0.3279 per kWh
- Night: $0.21 per kWh
As you can see, if you can run your power-hungry appliances at off-peak times, you can possible save a lot on your power bill. And some providers offer free daily power deals, too, which deliver even further value.
4. Can you bundle and save?
Not all bundle deals are created equal, but by combining your electricity with gas, broadband and/or mobile phone plans, you can possibly save money. You can find the results of Canstar’s latest Best Bundled Utilities Award here.
5. Compare electricity providers
You’re not going to find cheaper power unless you compare providers. Canstar’s latest consumer research reveals that while 71% of Kiwis actively practise energy savings to reduce their power bills, only 39% have compared electricity providers over the past year.
So check your latest power bill for how much you’re paying per kWh and your daily fixed rate, then jump online and compare what you’re paying for electricity with the rates offered by other power companies in the market.
Most big power providers give instant quotes on their websites, all you have to do is enter your address for details. And before you look into pricing, don’t forget to check out the results of Canstar's latest Electricity Award, and the best electricity providers, as rated by thousands of Kiwi households.
