So Powershop lowers switching costs, but as you can see from the headline it also lowers actual costs.
So how much can you save? If you are like me – then a lot.
I was using Contact, who like the other companies, charge in two ways – cents per unit consumed (kWh) and a service fee. Powershop charges just c/unit and does not have a service fee.
It’s hard to compare last year with this year, beacause there have been some tasty prices rises in the interim.
Between my September 2008 and January 2009 bills the daily “One Meter Managed” service charge rose from $0.9811 to $1.102 – a 12.3% increase. That’s an impressive increase in a recession, and not justifiable on what has to be an almost entirely local cost base.
Meanwhile my kWh price from Contact rose from 17.292 to 19.059 c/unit- a 10.2% increase. That 19.059 cents is before GST – so the actual price per unit is 21.44 c/unit after GST.
The average home uses 8000 units per year, or just under 22 units per day. At that rate the $1.102+GST charge is equivalent to 5.66 cents per unit, making the actual price per unit 27.0977 c/unit. This is the rate to compare to the Powershop rates, which include GST and service fees.
I save 32.5% at the moment
The cheapest Powershop charges for me right now (they vary by location, time and usage) are 18.36 cents per unit, including GST. (Our own FlowerPower and Powershop’s Standard Power are both at that rate.) That’s 32.25% less than Contact’s price per unit including daily charge of 27.0977 cents.
32.5% is a staggering difference for an industry that is meant to be low margin.
However the Powershop prices do change by season – and we are in a relatively low price season (for Wellington) right now. Winter is the peak period, and Powershop is selling me power in advance for winter at 22.49 cents. That will rise as winter approaches, but as 22.49 cents is still 17% lower than the 27.0977 cents that Contact charges I feel optimistic that the Winter rate will still be less. (I don’t know – our margins are tiny and the wholesale price dictates all).
Now I was away for most of the time during December/January, and so the impact of the daily rate was much higher in cents per unit terms. That 18.36 cents per unit was almost HALF (52%) of what I paid per unit for December January. (Your results WILL vary, but this is astonishing)
Do this using your own power invoices (we will work on handy calculator) and prepare to be shocked.
Find your cents per Unit (kWh) rates on your bill, add 8 cents per unit to them to make them comparable, then compare with Powershop’s rates. (8 cents is 5 c/unit for daily charges and 3 c/unit for GST).
So sign up to Powershop and save, and sign up with via this link and get $20 free “sign-on bonus” electricity as well.
Up next – FlowerPower and Powerkiwi.