Power prices and Mercury's three year fixed plan

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timmmay

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Topic # 85502 20-Jun-2011 21:02

Mercury energy is offering me (and presumably others) residential power for 3 years fixed at 113c/day and 23.5c/kwh. For me that'd be an extra $18/month above their current standard rates now, but in three years I could be paying less than market rates if power goes up. I've just come off a 3 year plan with them, it saved me $30 this month compared with their standard rates. For comparison I could save $15/month just by switching to a different supplier (Meridian), so the fixed price thing has probably saved me a small amount over the past three years.

I guess it only makes sense if power prices increase at a faster rate than in the past 3 years. Thoughts?

For reference the early months of winter we used 950kwh in a month, I think in the middle of winter that'll go up to more like 1300kwh, and in summer it drops to about 400kwh. I use http://www.powerswitch.org.nz/ to work out the best provider.

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Reply # 483415 20-Jun-2011 21:30

Call Meridian and see what they can do as I know they offer fixed price plans also.

timmmay

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Reply # 483417 20-Jun-2011 21:35

I'm not sure I care enough to call around asking about things they don't advertise or promote. Their fixed plan will probably be similar to Mercury, give or take.

I'm more interested in a discussion about whether paying about 7% more now is a good idea, given it's fixed for three years.

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casewindow

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Reply # 483419 20-Jun-2011 21:39

We have just come off the Mercury 2 year fixed plan (which for some reason went on for 3 years - maybe because we didn't have a price rice and Mercury pledge to give you the cheapest option available in your area.

Anyway - I track our power very closely in a spreadsheet and the long and the short of it is that for us, the non-fixed price increase (that happens because Mercury are putting their price up) will mean a 20% increase per year and the fixed-price 3 year offer will mean a 30% increase per year.

Our current rate, after GST & 10% prompt payment discount at the moment is
19.98c per unit electricity
6.86c per unit gas
101.03c per day electricity connection
120.06c per day gas

The three year fixed price offer, after GST & 10% discount will be:
23.79c per unit electricity (+19%)
14.01c per unit gas (+105%)
114.32c per day electricity connection (+13%)
108.12c per day gas (-10%)

Pretty outrageous offer so I used powerswitch and found that Meridian may offer a better deal. I plan to call them this week.

Edit: The short answer from my point of view is that the 3 years we've had on a fixed price have clearly been pretty good if prices have now gone up by this much.

timmmay

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Reply # 483420 20-Jun-2011 21:43

What are you calling Meridian about? All the info's on their website.

Do you know if you saved money in the past 2 years being on the fixed price plan? I haven't tracked mine at all.

I'm coming off about 80c/day fixed charge and 19.28c/kwh.

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timmmay

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Reply # 483423 20-Jun-2011 21:44

casewindow: Edit: The short answer from my point of view is that the 3 years we've had on a fixed price have clearly been pretty good if prices have now gone up by this much.

Just saw this. So you think paying the extra 10% or so now is worth it, given prices will probably go up 20% or more in the next few years?

I think Mercury is more expensive than other companies, so you have to weigh that up. Right now i'm tending toward switching to Meridian.

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casewindow

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Reply # 483427 20-Jun-2011 21:49

timmmay: What are you calling Meridian about? All the info's on their website.

Do you know if you saved money in the past 2 years being on the fixed price plan? I haven't tracked mine at all.

I'm coming off about 80c/day fixed charge and 19.28c/kwh.

Because when I delve into the Meridian plan details there seems to be a lot of options for my area with no actual explanation of specifically what they are. They have 'packs' which seem to be right, but I want to taylor exactly what plan I am on.

I think we have definitely done well out of the Mercury two year plan because I regularly check the powerswitch site and until recently all our details pointed to Mercury being near the top for our options (and this is with their standard/non-fixed plans).

Mercury gave us a rebate anyway one year because they worked out we could have got the previous year cheaper so I think you kind of always "win" with Mercury in terms of not paying more than you should with them, but in terms of comparative to other options it looks like Meridian may be offering a better deal (once I can get them to decode their plan PDF for my area)

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Reply # 483429 20-Jun-2011 21:57

Interesting, in my area (Wellington) it's just a daily charge and a charge per kwh.

I guess i'll ponder it for a few days and see if anyone else has any thoughts.

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Regs

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Reply # 483443 20-Jun-2011 22:29

have you considered using powershop as a provider? I ran the numbers a while back and was pretty sure i was saving between $200-$300 for the 2010 year over the best other offer.

one piece of advice - create your own spreadsheet and run the numbers as the 'esitmators' out there dont necessarily use the right rates. e.g. if the estimator calculates your power using 8000kwh then you might be comparing the higher cost plan (low user) instead of the higher use plan (standard) which would kick in at 8001kwh

also, if you have Gas too - dont believe that you're saving money by having both gas+elec at the one provider. My Gas is with Genesis and Electricity with Powershop and I saved more than a dual-fuel plan with genesis, and *way* more savings that with the dual-fuel plan at contact or mercury.

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StarBlazer

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Reply # 483491 21-Jun-2011 08:53

Regs: have you considered using powershop as a provider? I ran the numbers a while back and was pretty sure i was saving between $200-$300 for the 2010 year over the best other offer.

one piece of advice - create your own spreadsheet and run the numbers as the 'esitmators' out there dont necessarily use the right rates. e.g. if the estimator calculates your power using 8000kwh then you might be comparing the higher cost plan (low user) instead of the higher use plan (standard) which would kick in at 8001kwh

also, if you have Gas too - dont believe that you're saving money by having both gas+elec at the one provider. My Gas is with Genesis and Electricity with Powershop and I saved more than a dual-fuel plan with genesis, and *way* more savings that with the dual-fuel plan at contact or mercury.

+1

Not sure how much I'm saving with PowerShop but I like the idea that I can "stock up" on power and spread my winter bill through the summer. I also did a spreadsheet to compare the prices when I last changed - that way you can compare what your bill would be like if the consumption went up and down. We use around the 8000kWh/year and paid on average 21.21c per unit last year with powershop - and remember there is no line charge - what you pay per unit is all you pay. Gas also with Genesis.

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Reply # 483502 21-Jun-2011 09:22

PS - I just did the "what's my number" and it completely miscalculated my usage and cost.

My actual usage was 7203 which cost me $1589 - according to WMN my bill should have been $1870 and recommended that I switch to Meridian Energy!! I know these calculators are only as good as the information they have - but just shows you that it's worth doing the calculation yourself!

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timmmay

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Reply # 483522 21-Jun-2011 10:00

I don't really want to actively manage my power, I just want to choose a provider and use it. Powershop seems like they can do that, but to get their full savings you have to actively manage it.

Pre buying power packs in summer to use in winter seems crazy. Power needs to be generated when it's needed, it's a strange market model. Still, if I can spent $1000 on power in summer that will give me $2000 worth of power to use in winter, I can do that.

With so many power companies I guess the market has created competition, but with so many duplicated resources money is being wasted and power is more expensive than it should be. One well run power company would save money for everyone.

Someone above said Powershop costs more in winter. I think i'll ignore the fixed price thing and switch to Meridian, then reconsider in summer. I'll do my own power calculation first though, rather than trusting powerswitch.

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Reply # 483528 21-Jun-2011 10:20

timmmay: I don't really want to actively manage my power, I just want to choose a provider and use it. Powershop seems like they can do that, but to get their full savings you have to actively manage it.

The current "do nothing" price on powershop is still lower than Meridian.

timmmay:Pre buying power packs in summer to use in winter seems crazy.

Why? You're only spreading the cost throughout the year.

timmmay:Someone above said Powershop costs more in winter.

True but it's still cheaper than Meridian.

I've just convinced a friend to switch. Comparison with Meridian showed that he was paying nearly 28c/unit in December10 (including the line charge) and June10 was around 24c/unit. With powershop for the same two months my unit price was 19.06c/unit (Dec10) and 21.27c/unit (Jun10).

I'm not trying to be argumentative - so sorry if my comments come over that way - but I think Powershop are great

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Reply # 483532 21-Jun-2011 10:34

For 8000kwh Meridian is currently cheaper than Powershop, according to the Powershop website.

I didn't start this thread to find the cheapest power, i'm quite capable of doing that myself. I started the thread to discuss the idea of paying a little more for power now, given it's fixed for three years and power prices will probably go up.

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myopinion

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Reply # 483534 21-Jun-2011 10:38

This sounds like a Telecom marketing plan to me - confuse the hell out of customers.

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Reply # 483545 21-Jun-2011 10:55

timmmay: For 8000kwh Meridian is currently cheaper than Powershop, according to the Powershop website.

True - they put a comment underneath the check "The deal you have with your current provider is competitively priced, but if you do switch to Powershop you’ll find you can save money by buying our regular specials and monitoring and managing your usage." - I enjoy chasing the bargains

I didn't start this thread to find the cheapest power, i'm quite capable of doing that myself. I started the thread to discuss the idea of paying a little more for power now, given it's fixed for three years and power prices will probably go up.

Good point. Should you fix? It's a gamble like fixing your mortgage. You are trying to guess whether the variable cost will increase at a greater rate over the three years than the fixed rate.

For Example, if you pay 10% more now, it needs to be at least 10% cheaper at the end of the three years and have increased steadily so that the 0% saving is at the mid point - which means you are betting on a 20% increase. If it reaches the 20% increase earlier than 3 years you have saved. If it doesn't, you didn't. When did they last increase their prices and by how much?

The only benefit I can see is that you won't get any nasty surprises in the next 3 years. I'm sure they have analysed the figures and predictions to the finest detail - you probably will save something but they will have a guaranteed customer for the next 3 years - that's what they get out of this.

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