Co-author: Nicole Barratt
Given the variable nature of electricity bills, they are typically the worst offenders in shocking us to our core. The bill must be wrong? We didn’t possibly use that much electricity? How are we going to pay? These are just some of the questions that could come to mind, but what about the answers? At a time when many New Zealanders are concerned about cash flow, Canstar Blue has produced a quick guide to help you understand that shock energy bill, and your next steps.
Could the bill be wrong?
You might be clinging on to hope that your energy bill is wrong, but unfortunately it’s extremely unlikely. Sure, energy bills have been wrong in the past, but in the vast majority of cases, your bill will be accurate. That might not be what you want to hear, but it’s the reality. Unfortunately, you really did use that much power!
That said, it’s worth understanding a bit about how your bills are calculated, just in case something goes wrong, or maybe you have an estimated bill. When you get an energy bill, it will have been produced in one of the following ways:
- Quarterly meter reading: Someone visits your property to read your energy meter so your provider can give you an accurate bill.
- Monthly accurate bill: If you have a smart meter, your energy provider will receive a monthly review of your energy usage for accurate billing.
- Monthly estimated bill: If you don’t have a smart meter, but your provider has monthly billing, you may receive a monthly estimated bill based on your typical usage, or an amount picked by your provider.
You may also have agreed with your energy provider an amount to pay each billing period as part of a bill smoothing plan. But in this case, the bill shouldn’t have come as a surprise.
If you’re thinking about calling up your energy company to ask why your bill is so high, it’s a good idea to know which of the above bill types you have received.
- If you’ve received a quarterly bill after a physical meter reading, it’s not inconceivable that the meter reader got his or her numbers wrong. While unlikely, you could check the meter yourself and report the figures to your provider so they can cross-reference them with what they have.
- If you’ve received a bill that was derived from your smart meter, it’s quite unlikely that this would be wrong. But once again, you can ask your provider to check again.
- If you’ve received an estimated bill – and you’re convinced it doesn’t accurately reflect the energy you’ve consumed over the last month – this is worth discussing with your provider, in case your bill estimates can be adjusted.
The only other type of meter reading you’re likely to receive a bill for is a ‘special meter reading’ in the event you’re switching providers between standard meter readings, or you’ve just moved into a property and are now taking over responsibility for the bills. Special meter readings may come with a fee.
Why would my bill be so high?
So, if you’ve accepted that your shock energy bill is probably accurate, it’s time for the inquest into how you ended up with such a high bill to begin. It may or may not be your fault…
Reasons why it’s not your fault
- Your energy rates have increased. Unfortunately, this is a reality of energy retail. Your provider may have increased its charges without you realising – and now you’re paying for it.
- Your plan’s benefit period (i.e. discount) has ended. If you had a plan with a discount for things such as paying by direct debit, you might find the benefit period has come to an end and you’re no longer receiving the discount.
Even though these things are not your fault, you will have little recourse with your energy provider. They probably mentioned the rate change or benefit period coming to an end in a previous bill or other note.
Reasons why it is your fault
- You’ve simply used more energy than normal. It does seem hard to believe sometimes, but the reality is that energy consumption does change, especially with the seasons. You might not think you’ve been using the air conditioner (for example) more than normal, but if the season has just moved from spring to summer, there’s a good chance you have. Three months between quarterly bills is a long time and habits do change. Maybe you’ve had more people staying in your home than normal?
- You still owe money from a previous bill. If you didn’t pay your last energy bill in full, it could be that the outstanding amount has been added to your new bill. This should be clearly noted as an outstanding amount rather than new charges.
In most cases, your shock bill will be because you’ve simply used more energy than normal, whether that’s because it’s become hotter or colder between seasons, you’ve had other people staying with you and you’ve used more power as a consequence, or your energy consumption habits have changed in another ways.
What if I don’t have enough money to pay my electricity bill?
That’s the problem with shock bills – they can completely destroy your budget. If you’re struggling to find the cash upfront, the good news is that most energy providers will be perfectly happy to grant a short extension of a week or two, so you can recover from the shock and find the money you need.
If you need a little longer to pay the bill, you should discuss payment plans with your provider. Energy companies will generally have hardship policies that involve negotiating a payment schedule with customers based on what they can afford. This is usually only reserved for when customers regularly fail to pay their bills, so see how you go with a short extension first.
The worst possible thing to do when you can’t afford your energy bill is to bury your head in the sand and hope it goes away. Speak with your provider and explain the difficulty you’re having. You might be pleasantly surprised by how accommodating they can be. Failure to communicate can ultimately result in your overdue balance being passed onto a debt collection agency and your energy being cut off. And you don’t want that to happen! Canstar Blue recently covered concerns about paying electricity bills in our story: Power Bill Hardship: What Do Consumers Need To Know?
How do I avoid this happening again?
Everyone has experienced a shock energy bill, but the important thing is that you learn from it and take some practical steps to avoid being left short again. Here are some tips:
- Get yourself on a better energy deal. No matter how much cash you save up in advance, or how much you can reduce your energy usage, you’re already paying too much if you’re not on a good power plan. To help you find the best value electricity retailer, Canstar rates NZ power companies for customer satisfaction and value for money, see the table below for some of the results:
Canstar Blue’s latest review of NZ power companies compares them on customer satisfaction. The table below is an abridged version of our full results, available here.
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Canstar Blue NZ Research finalised in April 2022, published in June 2022.
See Our Ratings Methodology
- If you pay quarterly, put some cash away every month in preparation so you already have money on hand when the bill drops.
- Think more carefully about your energy usage, including which appliances use the most power and what you can do to reduce this, such as using the air conditioner less and only running the dishwasher once a day rather than twice. Encourage others to think more carefully about their energy consumption, too.
- Talk to your provider about bill smoothing. This basically means you’ll pay the same amount each billing period, so you remove the peaks and troughs of seasonal energy bills.
So, there you have it. Hopefully the information and tips provided above answer all the questions you have about shock energy bills, which suck, for sure. Just remember that preparation is the key, make sure you talk to your provider if you’re struggling to pay … and make sure you’re on a good deal!
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