Rather than bill customers directly, we charge the electricity retailers for the cost of delivering their electricity. They then ‘bundle up’ our line charges along with power generation, transmission (through Transpower’s national network) and their own retail charges into the bill that a customer receives.
Our line charges, which amount to about 28% of a residential customer’s power bill, are regulated by the Commerce Commission.
The following graph shows how our prices compare with those of other electricity distribution businesses in New Zealand.
Reducing peak demand
Like roads, electricity networks have limited capacity. Orion’s ‘rush hours’ typically occur on very cold winter mornings and evenings – when people get up and go to work and when they arrive home from work, turn on their lights and heaters and cook dinner.
We could just spend money to increase the capacity of the network, which is like building bigger roads to cater for extra traffic. But this would lead to increased prices for capacity that is only required about 2% of the time.
We prefer to handle the peaks through load management and to have pricing that encourages more efficient use of our network.
For example, if a customer allows us to switch off their hot water cylinder for short, peak periods (generally this does not affect their hot water supply) they should achieve savings.
Consultation on price changes
Electricity delivery pricing in New Zealand is developing to better meet customer needs and accommodate a number of new technologies. In 2017 we consulted with electricity retailers, consultants, industry groups and technology suppliers on some initial changes that we proposed for April 2018, as well as discussing longer-term options.
In 2018 we are aiming to progress further and issued a second consultation and discussion paper:
The Electricity Authority has asked us to set out a road map for our pricing reform and we have set this out in Appendix C of our annual Methodology for Deriving Delivery Prices. Each September we will provide an update on our progress.
Pricing guide and information
The latest edition of our Pricing Guide is now available. The guide explains in plain English our approach to residential and business pricing.
For a more comprehensive description, see our Methodology for Deriving Delivery Prices.
To see a list of our disclosed pricing documents, please visit our pricing information page.
Orion has the same delivery charges for all electricity retailers. The retailers have responsibility for deciding the final price that is charged to their customers. To find out which energy retailer is best for you, visit Powerswitch, run by the Ministry of Consumer Affairs.