Notes on Annual Survey
[ Last Updated 26 January 2006 ]
Background
This survey is now updated in August each year. It contains historical data back to 1984.
Figures represent the average retail charge paid by the consumer and the component of that charge which can be attributed to lines company and transmission charges.
Charges per kilowatt-hour are calculated by dividing the total cost to the consumer over a 30 day period (including both fixed and variable components) by the number of kilowatt-hours used in that period.
Line Charges
Line Charge figures represent the average price charged by lines companies. They are broken down into distribution and transmission components1. The figures are derived from information disclosed by line owners under the Electricity (Information Disclosure) Requirements 2004 (administered by the Commerce Commission).
Line charges are available back to 1994 when the information disclosure regime was introduced with the Electricity (Information Disclosure) Regulations 1994.
New regulations were introduced following the separation of electricity line and supply businesses in 1999. These requirements, contained in the Electricity (Information Disclosure) Regulations 1999, did not require the disclosure of the split between distribution and transmission. While some line owners disclosed this breakdown, others did not, so where not available, the transmission component was held constant at the 1998 level.
In 2000, the regulations were amended to require the transmission component to again be disclosed. The regulations were revoked in April 2004 and replaced by the current Electricity (Information Disclosure) Requirements 2004.
Note that distribution and transmission charges may not add to the total charge due to rounding.
Retail Charges
The Retail Charge figures represent the average retail price in each lines company area (network area).
Retail tariffs for domestic and rural consumers were previously monitored by the Rural Electrical Reticulation Council (RERC), and date back to 1984.
The average charge for years prior to 1999 is calculated from the tariffs of the pre-reform electricity company. From 1999, the charges for the incumbent retailer are shown. The incumbent retailer is the retailer that acquired the retail business of the previous electricity company.
Retail tariffs have been obtained from retailers, and in recent years, the calculations used to produce the average charges have been checked and verified by the company concerned.
Calculation Methodology
Average retail and line charges are calculated for six model consumers. The average domestic consumer uses approximately 667 kWh per month. The characteristics used for the model consumers are:
| Consumer Characteristics |
kWh per month |
| Domestic |
Small |
500 |
| Medium |
1000 |
| Large |
1500 |
| Commercial |
Small |
500 |
| Medium |
1500 |
| Large |
3500 |
For each model consumer, the total cost of retailed electricity has been calculated for a 30 day month. The total cost has been divided by the number of units purchased to produce the average retail cost per unit (being the use of one kilowatt of electricity for one hour). Average line charges have been calculated in a similar way using a 30 day month.
The following assumptions have been made when determining retail charges:
- Tariffs associated with the meter configuration that is most common in the network area have been used. Typically, tariffs associated with a dual meter configuration, with one uncontrolled and one controlled meter, have been used. In some cases "all inclusive" tariffs associated with a single "composite" (with controllable load) meter configuration have been used2.
- Where a dual meter configuration has been used each model customer is assumed to consume 60% of their energy on uncontrolled appliances and 40% on controlled appliances.
- Where retailers offer more than one controlled rate, the rate closest to 20 hours guaranteed supply each day has generally been chosen.
- In the case of domestic tariffs the optimal tariff at a given level of consumption, when comparing low user fixed charge options to standard tariffs, has been used.
- Where different rates apply to summer and winter loads, weighted averages have been used.
- Prompt payment discounts and loyalty rebates have been taken into account where available, but discounts for paying by direct debit have not been allowed.
- For the model domestic consumers, a 1 phase, 60 amp connection (kVA rating of approximately 15) has generally been priced. Occasionally a smaller connection has been used for the small domestic consumer. The connection capacities for the commercial consumers have been targeted historically at 10, 20 and 30 kVA respectively. Generally, a single phase supply for small commercial and a three phase supply for the large commercial customer have been used.
Similar assumptions have been made when calculating the average line charges.
Note that there has been a change in the treatment of charges for metering and load control equipment at the customer's premises. In 1998 these charges were included in the distribution component of the line charge. From 1999 they are no longer a part of the line charge but still contribute to the average retail charge. All else being equal, a small decrease would be expected in the reported average line charge from 1998 to 1999 because of the re-classification of metering and load control charges out of line charges into the "energy" component of the retail charges.
Some line companies have a co-operative type of ownership structure and grant line charge holidays or discounts as a way of returning a proportion of profits to consumers. These may or may not be granted depending on the profitability of the company. The consumer has no contractual right apart from their ownership interest to receive any such distribution of profit. Line charge holidays and similar profit distribution schemes have not been allowed in these calculations. However, a Discount and Distribution Analysis of these type of discounts is available.
Inflation Adjusted Figures
Domestic charges have been adjusted using Statistics New Zealand's Consumer Price Index (CPI), All Groups. Commercial charges have been adjusted using Statistics New Zealand's Producer Price Index (PPI) - Input, all ANZSIC3 industries.
Goods and Services Tax
Goods and Services Tax (GST) has been included in the domestic charge calculations but excluded from the commercial charge calculations.
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