Powershop - Guide for buying power

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nakedmolerat

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#138728 14-Jan-2014 23:37

Hi guys, I recently moved to Powershop after find out that I actually spend too much money with my previous power company. There are few things that I am confused with Powershop.

Powershop is selling 'power' for month:

March 26.04 cent/unit
April 27.36 cent/unit
May 27.00 cent/unit
June 26.70 cent/unit
July 26.58 cent/unit

There are currently a few 'Value Pack' for month Jan / Feb:

Simple saver 17.78 cent/unit
Supercharged 23.12 cent/unit
Value pack 23/45 cent/unit
Top Up 23.58 cent/unit

As you can see, the current offers are way cheaper than those selling from March onwards.

My question is, let say I have $2000 to spend now. I know my average is 1000 unit / month. If I just buy all the power as advertised - is this a good move or a bad move? I assume there will be some sort of value pack/offers every now and then therefore, is it better to manage the account monthly?

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Snowflake

#967227 15-Jan-2014 02:52

I think the monthly simplesaver special may be better savings than pre-buying all the powerpacks. perhaps best strategy is to buy some, but not all, ahead of time.

there is always a chance, however slim, that the power price will drop too... depends on demand and weather etc...

hairy1

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#967248 15-Jan-2014 06:57

My strategy has been to buy ahead in summer for the winter and then run my credit right down as it heads into summer as the prices drop. I have no idea whether it works or not.

My views (except when I am looking out their windows) are not those of my employer.

nakedmolerat

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#967262 15-Jan-2014 07:48

That's interesting. No real consensus so far. I wonder how often the price will go a lot higher during the winter time compared to the prepaid pack

Hammerer

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#967264 15-Jan-2014 07:59

As hairy1 suggest it is generally best to buy most of your winter power by March/April and then only buy specials until September when the summer prices start to come in and you can start buying larger amounts again. In other words buy in advance in Summer when prices are low and put off buying in Winter when prices are higher. It works because Powershop winter prices are based on their contracts so they are a reasonable indicator of what their winter prices will actually be.

You should buy to fit your consumption profile rather than the average amount for each month. Winter power is always more expensive than summer power and you would normally use a lot more of it. For example, we use at least twice as much power in June than in December.

Always try to buy the regular monthly special plus any other specials that come up. In summer I used to cover almost all our requirements with the specials so it was never worth buying summer power in advance.

How you buy your winter power will probably be based on your finances:

there is a financial cost to buying in advance. For example with mortgage interest rates at 5% pa and saving interest rates somewhat lower buying six months in advance adds .5c to the cost. If using a credit card at an interest rate of 20% then six months in advance adds 2.5c so it's almost certainly won't be the cheapest option.
You might also want to even out monthly power expenditure by buying more than you need in summer and spending less in winter when you use up your advance purchases.
If you want certainty and no shock then buy in advance.

Remember that any power purchased for a month can be used in the month following up to your monthly anniversary. Up until I left them last year - by the way, I didn't leave because of price - Powershop refunded the unused purchases for each month.

nakedmolerat

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#967442 15-Jan-2014 11:17

For me, power usage is similar throughout the year. In winter we have heatpump n heater going on and in summer air conditioner and fan.

jonathan18

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#967447 15-Jan-2014 11:22

Hammerer: As hairy1 suggest it is generally best to buy most of your winter power by March/April and then only buy specials until September when the summer prices start to come in and you can start buying larger amounts again. In other words buy in advance in Summer when prices are low and put off buying in Winter when prices are higher. It works because Powershop winter prices are based on their contracts so they are a reasonable indicator of what their winter prices will actually be.

You should buy to fit your consumption profile rather than the average amount for each month. Winter power is always more expensive than summer power and you would normally use a lot more of it. For example, we use at least twice as much power in June than in December.

Always try to buy the regular monthly special plus any other specials that come up. In summer I used to cover almost all our requirements with the specials so it was never worth buying summer power in advance.

How you buy your winter power will probably be based on your finances:

there is a financial cost to buying in advance. For example with mortgage interest rates at 5% pa and saving interest rates somewhat lower buying six months in advance adds .5c to the cost. If using a credit card at an interest rate of 20% then six months in advance adds 2.5c so it's almost certainly won't be the cheapest option.
You might also want to even out monthly power expenditure by buying more than you need in summer and spending less in winter when you use up your advance purchases.
If you want certainty and no shock then buy in advance.
Remember that any power purchased for a month can be used in the month following up to your monthly anniversary. Up until I left them last year - by the way, I didn't leave because of price - Powershop refunded the unused purchases for each month.

All good advice there, which I too tended to follow when a Powershop customer.

Once you've been with them for a year you'll have a good record of data on which to base future purchases on; even for this coming year, you could always check out your usage with your previous provider. That said, any unused units will always be returned in the end as credit (so not the same as pre-pay phones, thank god!).

My suggestion is always buy the monthly special; ditto any other decent specials they do (eg, during winter last year they had regular additional specials that were significant both in terms of price discount and numbers of units). The smartphone app can be set to let you know of these, and purchasing via the app is dead simple.

Some of their other "specials", as you'll see, offer little discount and aren't worth it, IMO.

My understanding is that units bought via specials are used first, before any power packs you may have.

Re purchasing units in advance: to me it's much the same as paying one's insurance premiums annually rather than monthly, in that while it requires more money up-front, once that's over there's no additional burden. There was something also reassuring about having purchased power in advance - a bit like wood in the shed ready for winter! Assume, though, that some of your future needs will be met by purchasing specials (this will vary over the year; as mentioned, it was far more reasonable last winter than the rest of the year, but there's no guarantee this will be repeated). I was told that should there be a reduction in power pack prices after one purchases them, they could arrange a refund.

I was totally happy with Powershop, and to be honest regret being sucked in by the salesman who came a knocking last month; while we'll save a bit (almost in total due to the "cash" inducement and three months free gas), I wish I had got off my @rse and cancelled the contract within the 10 days. I had kinda expected Powershop to call, but received nothing but auto emails to arrange the reconciling of our account (resulting in a refund of all the unused power). Roll on the end of my new 12-month contract...

timmmay

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#967479 15-Jan-2014 11:56

I find this method of buying power crazy. It's all the same power, delivered from the same generators over the same wires. Active management of utilities seems like a real waste of time, and of talent of the people who bothered to come up with such a convoluted theoretical system.

A single central regulated power company would probably lower costs for all, if run properly, but I guess they went to the market model because that wasn't working.

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nakedmolerat

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#967485 15-Jan-2014 12:13

If I have two different value pack bought at different time of the week, which one will be used first? The cheapest one?

jonathan18

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#967489 15-Jan-2014 12:22

nakedmolerat: If I have two different value pack bought at different time of the week, which one will be used first? The cheapest one?

I'm unsure of the answer to this one, but I assume you're a current customer of Powershop? If so, I've found them really prompt to answer such questions, either via email (nearly always same-day response) or on the phone.

nakedmolerat

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#967506 15-Jan-2014 12:50

Wow received my reply within 10 mins

Thanks for your email.

The rules for consumption of products are:

Powershop will use the product that expires first, if a clash

We will use the product that is a special first, if still a clash

We will use the cheapest product first and if still a clash

We will use the product that you bought first.

deadlyllama

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#967535 15-Jan-2014 13:37

timmmay: I find this method of buying power crazy. It's all the same power, delivered from the same generators over the same wires. Active management of utilities seems like a real waste of time, and of talent of the people who bothered to come up with such a convoluted theoretical system.

A single central regulated power company would probably lower costs for all, if run properly, but I guess they went to the market model because that wasn't working.

They (National in the late 90s) went to the market model because they are true believers in the market model, no matter how well it works in practice. As a result we have lots of theoretically cheap hydroelectricity, but high power prices. And fun games like Genesis putting up the price for power from Huntly to other companies when transmission lines go down or need repairs.

To get back on topic, yes, it's crazy, I switched away from Powershop when we moved houses last year because I don't want a relationship with a power company. I just want the lights and the heaters to work, and to not pay an arm and a leg for the privilege. I don't want my phone buzzing to tell me there's a special. Seriously, why don't they have an autopilot mode that buys winter power and specials for you?

shrub

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#967643 15-Jan-2014 16:15

I found powershop to be more expensive over a year than genesis the high winter prices stay high right up to December and then march its right back up so for the 3 months of below market rate did not make up for the winter price hikes.
If you stick to the packs then yea it might be cheaper but how much of your time is consumed messing around with a service that your still paying for.
I have no electric heating or water cylinder so my bill is very static $80-90/month.

Aredwood

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#967871 16-Jan-2014 00:36

Be careful if you are buying "season" packs within a month or so of signing up. As they hide the fixed charges in the unit cost. They take the fixed costs, divide that by the number of units used last month then add that to the current unit price. This means if you are a low user, your price is high. If you are a high user, your price is low. But in the first month they use a set figure. If I had known this at the time I had originally joined powershop. I would have bought heaps of packs. Would have easily saved 10c per unit. (I was a low user at the time)

Archer77

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#968668 17-Jan-2014 09:31

Is Powershop very easy to manage? I just used Consumer's powerswitch and entered my actual readings for the past 12 months (8141kW for the family) so the list of retailers/prices are as accurate as they can be. I'm currently with Contact. Energy Online is the cheapest post-pay retailer and will save me $91/year. Powershop is of course the cheapest and would save me $145/year ($54 more saving than Energy Online).

Is the hassle of managing and monitoring a Powershop account worth the $4.50/month saving it will give me? I'd think not but interested in what those who are/were with Powershop think.

heapsort

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#968719 17-Jan-2014 10:20

Archer77: Is Powershop very easy to manage? I just used Consumer's powerswitch and entered my actual readings for the past 12 months (8141kW for the family) so the list of retailers/prices are as accurate as they can be. I'm currently with Contact. Energy Online is the cheapest post-pay retailer and will save me $91/year. Powershop is of course the cheapest and would save me $145/year ($54 more saving than Energy Online).

Is the hassle of managing and monitoring a Powershop account worth the $4.50/month saving it will give me? I'd think not but interested in what those who are/were with Powershop think.

My thoughts, having been a Powershop customer for a few years now.

The amount of "hassle" is really as much or little as you want.

I think you can choose to do absolutely nothing, at the cost of missing out on specials - never make any purchases directly, just let your nominated direct debit account or credit card get charged each month.

But I don't see keeping a positive unit balance as a hassle, and prefer to buy the first day of each month special (they save quite a lot) and the unexpected one-off specials (not as valuable, often saving less than a dollar each). I don't bother with the future packs. Some of the specials are holiday-related, and some are just random fun. I remember there was one about Donald Trump's silly Twitter outbursts just after the 2012 US Presidential election, for example.

It's easy to keep notified of any specials to avoid missing good ones, e.g. with the smartphone app.

P.S. I think the Powerswitch estimates can be very unreliable for Powershop. I definitely save more than that website suggests. My guess is Powerswitch probably doesn't take into account all the specials - and maybe it also misses other benefits like Powershop's Christchurch weekend rebate? (Great for my household as we use a lot more electricity on weekends - electric mower, catch up the washing, etc.)

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