Pricing

We are phasing in the option for retailers to apply 'time-of-use' peak and off-peak pricing for residential customers from 1 April 2024. Once fully implemented this will mean customers will pay more to use electricity during peak times, and less when using it off-peak. Time-of-use pricing will encourage people to move their discretionary electricity use such as turning on the washing machine or dishwasher, or charging their electric vehicle, to off-peak, when the network isn't as busy and the prices are lower. The time-of-use pricing impact will be neutral for customers with a typical usage pattern because the higher peak prices will be offset by lower off-peak charges.  

This is being done to minimise how much network investment we need to make. We also want to provide a pricing incentive for new technology users, such as EV owners, to charge during off-peak times so the impact on the network can be managed efficiently.

Your retailer (who you pay your power bill to) will decide whether to opt-in to our time-of-use prices and how to include these charges on your bill. Many retailers already offer off-peak pricing, so our price signals will complement this.

Watch the video below to find out more about how time-of-use pricing works:

Aurora Energy designs and builds our network to supply the peak demand. The cost to run our network is largely fixed regardless of how much electricity is consumed. The LFC regulations limited the amount of daily fixed charges that line companies like us (and retailers) could charge, meaning that our network costs have had to be recovered from variable charges (how much electricity you use).

Low Fixed Charge Tariff regulations were introduced in 2004 with the aim of reducing power bills for low-use, low-income households. However, they only help some low-use households and have pushed others into greater energy hardship, including many low-income families with high electricity use, for example larger families. 

Having more fixed charges means everyone pays their fair share. In line with regulation changes, we will phase out low fixed charges by 1 April 2027. This gives time for households to adjust to the new prices. 

You can find out more information here: Phasing-out the Low Fixed Charge Tariff regulations | Ministry of Business, Innovation & Employment (mbie.govt.nz)

Aurora Energy takes power from Transpower’s national grid and distributes it to your place via power lines and underground cables. Our costs are based on making sure our electricity network meets peak demand times when people are using the most power, such as the morning rush and in the evening when people are cooking dinner, heating their homes and getting kids in the bath.

Our line charges are just one part of your power bill, and each retailer (who you pay your bill to) packages up the costs differently. Some combine the costs and others itemise them. Our line charges recover the direct costs of distributing electricity to you across our network (distribution prices), as well as other indirect costs (pass-through prices) including incentives, rates, regulatory levies, and electricity transmission from Transpower’s national grid.

You can find out more about Transpower’s pricing, including their transmission pricing methodology, here: Grid Pricing | Transpower

Our distribution costs make up roughly 28-40% of your power bill. This graph shows the national average for how your power bill is split.

We often get asked how Aurora Energy’s line charges compare with other areas. Prices in the Dunedin area are currently below the national average and line charges in Queenstown Lakes slighter higher. Central Otago/Wānaka prices are higher than the national average. This is because there are fewer people on this network, and it also covers a large area.

Aurora Energy has three pricing areas: Dunedin, Central Otago/Wānaka and Queenstown Lakes. Please see below a breakdown of the line charge component of your power bill, depending on which pricing area you live in. You can find out more about how Aurora Energy sets pricing (pricing methodology) and our pricing roadmap here.

Average monthly bill for a Residential connection consuming 9000kwh of energy per year in different pricing areas. Please note this only shows the proportion of lines charges.

There’s an advantage to living close to a dam because your transmission charges will be lower – these are Transpower’s costs to get the electricity from the hydro dams to the grid exit point (where the power flows from the national grid to Aurora Energy’s distribution network). However, this is offset by these areas being less densely populated, meaning our distribution costs to service fewer customers are higher.

We offer controlled supply discounts to customers who let us manage things like their hot water during peak times on the network (known as ripple control). In the future we hope to extend this to discounts for other things like electric vehicles and storage batteries.

Find out more about managing demand

The Commerce Commission decides how much revenue we can earn by making sure we only receive revenue that reflects the costs of operating and maintaining the network. This is the same for all electricity distribution companies in New Zealand.

The Electricity Authority decides how much of that revenue is paid by customers, by setting guidelines for how prices are structured and what pricing approaches can be used.

You can find out more about how Aurora Energy’s sets electricity distribution prices here. 

Aurora Energy’s role is electricity distribution, however we’re often asked about retailers. If you’d like to compare your power bill, head to Consumer NZ’s website ‘Powerswitch’ for a free and independent check.

Powerswitch website

 This is the term your retailer may use for Aurora Energy’s line charges. These are the costs for distributing electricity from Transpower’s national grid to your property, including poles, wires and transformers.

 Aurora Energy has three pricing areas, which have different line charges so customers in one pricing area aren’t cross-subsidising the costs to provide electricity in another part of the network. The three pricing areas are: Dunedin, Central Otago/Wānaka and Queenstown.

Aurora Energy’s line charges can be either fixed or variable. Fixed charges are the same for all customers regardless of how much electricity they use. Variable charges are calculated based on the amount of electricity customers use. It’s worth noting that Aurora Energy’s costs are mostly fixed, and over the next few years we expect that fixed lines charges will increase and variable lines charges will decrease.

It is common for households with electric hot-water heating to allow lines companies, like us, the ability to turn off the electricity supply to the hot water cylinder when the network is busy. This is known in the industry as controlled supply. The control periods typically occur on cold winter days for a few hours at a time and are not usually noticed by customers. We offer a lower tariff for supply that is controlled. The remaining supply to the household can’t be turned off by the lines company and is known as uncontrolled supply – the uncontrolled supply is charged at a higher rate.

In houses with newer meters, we can separately measure the controlled and uncontrolled supply and invoice accordingly. However, for many households in Dunedin, the meters are older, and we can’t measure the controlled and uncontrolled supply separately, so we apply an ‘all-inclusive’ tariff. All-inclusive is a term used across New Zealand and simply means that the tariff is an estimated blend of the controlled and uncontrolled rates based on historic use patterns across the network.