Wellington Electricity (WE*) has introduced prices that will help keep electricity distribution prices low.
Why has Wellington Electricity introduced Time of Use pricing?
Like roads, electricity networks have limited capacity. On the Wellington Electricity network, the busiest times are on weekday mornings as people get ready for the day, and weekday evenings when people get home and have dinner. The more electricity is used during these busy periods, the larger the electricity network WE* has to build to provide that electricity.
If people change when they use electricity, away from these busy periods, a larger network doesn’t have to be built. Avoiding having to build a larger network means that prices can be kept low.
So, we are now making our residential prices more expensive during busy times (weekday mornings and evenings) and cheaper in the less-busy times (midday and night-time on weekdays and all weekend). We call the busy times “peak” and the less busy times “off-peak” and refer to this type of pricing as “Time of Use” (ToU).
Time of use prices let you save money by using electricity during the day or at night.
Weekdays (including public holidays) 7am to 11am and 5pm to 9pm
All other times
What is Time of Use pricing?
ToU pricing utilises the technology of new electricity meters that measure how much electricity is used at different times of the day. With ToU pricing, prices vary according to when electricity is being used; unlike traditional pricing which remain the same over the course of the day.
Why Time of Use prices will become even more important?
Electricity generated by renewable sources provides an environmentally friendly and inexpensive alternative to burning fossil fuels. As New Zealand moves towards our zero carbon goals, we forecast that the Wellington region will use more electricity. We expect to see an increase in electric vehicle use, that households and factories will increase their electricity use and reduce their natural gas usage. The increased electricity usage is expected to be significant. For example, our research shows that an electric vehicle will increase house hold energy use by approximately 34%.
Most areas of the Wellington Electricity network have spare capacity during the daytime and at night. ToU prices will help us use this spare capacity, helping us to meet the increase in electricity use while keeping prices as low as we can for our consumers.
How does this impact me?
Wellington Electricity now charges electricity retailers different prices for residential electricity usage at different times of the day. It is up to retailers how they re-package these prices along with other costs into the final prices they offer you as a customer.
For you, Time of Use pricing can be a useful way to save money by taking advantage of different electricity prices at different times of the day. You can check with your electricity retailer whether they will be offering ToU prices, or try Consumer’s Powerswitch website to compare retailer prices: https://www.powerswitch.org.nz.
TIPS TO LOWER YOUR BILLS
If you are on a ToU pricing plan with your retailer, you can save money by changing your habits and using your appliances during off-peak periods, rather than peak periods.
- Consider which appliances you could use during off-peak periods. For example, your dishwasher, clothes dryer and washing machine.
- Use timers on appliances like dishwashers so they only run at off-peak times.
- Charging your electric vehicle overnight or outside of the peak times. Many electric vehicles can be set to charge at specific times.