From 1 April 2022, the Government will begin a 5-year phase-out of the Electricity (Low Fixed Charge Tariff Option for Domestic Consumers) Regulations 2004.
The phase-out affects the pricing for Low User electricity plans, with the maximum Daily Charge, increasing by 30 cents per day (excluding any applicable discounts, and before GST) each April, until 2027 when the Regulation will be phased out completely.
We have decided to amend our Daily Charges in line with the Regulation changes, meaning from 1 April 2022 our residential electricity customers on Low User plans will see their Daily Charges change from:
Why are these changes being made?
The Low Fixed Charge Tariff Regulations were originally introduced to provide electricity users with a discounted fixed charge option that aimed to reduce power bills for low-use, low-income households.
Phasing-out low fixed charges was a recommendation to Government by the independent Electricity Price Review. The Review further recommended the regulations be phase-out over 5 years.
The Electricity Price Review assessment was the Low Fixed Charge Tariff Regulations were poorly targeted, and they only helped some low-use households while pushing others into greater energy hardship, including many low-income families with high electricity use
More information
For more information on the Low Fixed Charge Tariff Regulations can be found on the Ministry for Business, Innovation and Employment’s website.
Common questions and answers
When will I see these changes?
The changes take effect from 1 May 2022, so you will see your pricing change from your first bill after this date and onwards.
How much will my electricity bill change by?
It depends on your electricity consumption and the area you live in as we have decided to do this change at the same time as we review our general pricing for most customers.
On average, our low user customers will see a bill increase of around $1.66 per week.
What’s the difference between a Low User and a Standard User Plan?
We offer Standard User and Low User plan options for most of our residential electricity plans (note the Low User plan is only available at your primary residence and does not apply to secondary dwellings, holiday homes, or businesses).
Your best plan option depends on the amount of electricity you use.
Low User plan
Generally, this is the most suitable plan if you use less than 8,000 kWh of electricity a year (or 9,000 kWh in parts of the lower South Island including Christchurch but excluding the West Coast).
The plan has a lower daily charge and a higher variable charge compared to the Standard User Plan. It is only available at your primary residence.
Standard User plan
Generally, this is the best plan for higher energy users who use more than 8,000 kWh of electricity a year (or more than 9,000 in parts of the lower South Island).
This plan has a higher daily charge and a lower variable charge compared to the Low User plan.
How often can I change between Low and Standard User plans?
You can change between Low and Standard User plans at any time.
What pricing elements make up my Daily and Variable electricity charges?
Megatel’s electricity customer’s Daily Charge does not only contain network charges, and our Variable Charges do not only contain Megatel’s costs. Both charge types contain a mixture of Megatel’s costs, your network charges, and other third-party charges elements.
Your Daily Charge is made up of several costs; including meter rental fees, the overhead costs involved with our services, and, in most cases, charges from your network company. The Daily Charge appears on your bill as a ‘cents per day’ (c/day) amount.
Your Variable Charge(s) include(s) the “variable costs” of the electricity you use, and in most cases, a variable charge from your network company. The Variable charge(s) appears on your bill as a ‘cents per kWh’ amount.
I am on a fixed term plan. Do these changes apply to me, and can Megatel make these changes?
Yes. Megatel’s fixed term plans allow certain pricing components to be adjusted in certain circumstances, including for regulatory changes – which is the case here.
