Why You Should Switch Power Companies Every Year (And How to Do It in 15 Minutes)

Here is a stat that should annoy you: about 42% of New Zealand households have been with the same electricity provider for more than five years. Nearly 500,000 households — roughly one in four — have been with the same provider for more than a decade.

Here is another stat: the average household that switches saves about $358 to $388 per year. That figure comes from the government’s own Save500 winter energy campaign and independent analysis by Consumer NZ.

And here is the kicker: only about 6% of households actually switch in any given year.

Power companies in New Zealand have built an extraordinarily profitable business model on a single consumer behaviour: inertia.

Why switching is so easy in New Zealand (and why so few people do it)

New Zealand’s electricity market is unusual by international standards. There are no lock-in contracts for residential customers. No exit fees. No early termination charges. The same electrons flow through the same lines regardless of which company sends you the bill — the physical infrastructure is shared, and your power does not get “cut off and reconnected” when you switch. The only things that change are the name on the invoice and the price you pay.

So why do 94% of households stay put? Partly, it is the hassle factor. Comparing plans feels like work. Partly it is loyalty — people develop a sense that their provider is “fine” even though the product is identical. And partly it is the mistaken belief that switching is complicated. It is not. The entire process takes about 15 minutes online, and your new provider handles the transfer. You do not even need to contact your old one.

The one mistake most people make when comparing plans

Most comparison sites and provider websites lead with the daily fixed charge — the amount you pay per day just to be connected. It is the most visible number, so people fixate on it. But the daily charge is usually a small fraction of your total bill. The per-kilowatt-hour rate — what you pay for the electricity you actually use — is far more important for most households.

A plan with a low daily charge and a high per-kWh rate might look cheaper on paper, but actually costs more if you use a lot of power. A plan with a higher daily charge and a lower usage rate works better for larger households or homes with heat pumps, electric hot water, or EV charging.

The only way to compare accurately is to know your actual usage. Your most recent power bill will show your annual consumption in kilowatt-hours. Take that number, multiply it by the per-kWh rate for each plan you are comparing, add the annual daily charges, and you have an apples-to-apples comparison. Anything less is guesswork.

What you need to have ready before you switch

Switching takes about 15 minutes if you have these three things in front of you:

1. A recent power bill. You need your ICP number (a unique identifier for your connection point, printed on every bill) and your actual annual usage in kWh. If your bill only shows the last month, most provider websites let you download 12 months of usage history.
2. Your address. Sounds obvious, but your connection point is tied to the physical property, and the ICP number links to the network in your area. Different networks have different line charges, which affect the rates providers can offer.
3. A clear idea of your usage pattern. Do you use more power in winter (heat pumps, electric heating)? Do you charge an EV at night? Some plans offer free hours, night rates, or weekend discounts that can save hundreds if they match your actual usage — and cost more if they do not.

The “standard user” trap

The Electricity Authority publishes a benchmark called the “standard user” — roughly 8,000 kWh per year for a typical household. Most plan comparisons default to this number. But New Zealand households vary enormously. A one-person apartment in Auckland might use 4,000 kWh per year. A four-person family home in Christchurch with a heat pump and electric hot water might use 12,000 kWh or more.

If your actual usage is well above or below 8,000 kWh, a “cheapest for standard user” comparison could point you to the wrong plan entirely. Always use your own numbers.

Do it once a year

Power companies adjust their rates regularly, and the cheapest plan today is rarely the cheapest plan 12 months from now. Set a calendar reminder. Once a year, pull out a recent bill, spend 15 minutes comparing, and switch if there is a better deal. At an average saving of $358 per year, that 15-minute exercise pays an effective hourly rate of over $1,400. Not bad for admin work.

ValueHub’s utilities comparison pages help you compare power plans side by side with your actual usage numbers. Use the savings calculator to see exactly how much you could save by switching — no contracts, no catch, just the numbers.

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