Power Plans: Low User or Standard User

What is a low user?

As the name suggests, a low user is someone who doesn’t use a lot of power. If you fall into this category, you can save money on power by getting low-user rates on your power bill.

How do I know if I’m a low user?

To be considered a low user, your household must be:

• A household that uses 8000kWh a year or less
• For households in Christchurch and further south, this is set at 9000 kWh or less
• Your main household (holiday homes, vacant houses and offices cannot receive low user rates)

Because the above figures are calculated on average households (which account for large, power-hungry families) if you have a small house with just one or two people, it’s fairly likely you will be a low user.

Although, you should never assume this is the case, so it pays to double-check. Even a small family can quite feasibly be a low-user household, especially if it uses gas for heating and cooking.

Check how much you use

To find out if you are a low user, check your past power bills to see how much power you use. Or, ask your current power provider to give you a breakdown of your previous 12-months’ usage. If you don’t have 12 months of history available, you can estimate it. For example, 8000 kWh per year works out to an average of 667kWh per month.

Keep in mind that your usage can vary month to month. If you’re using 600kWh per month over summer, your winter bills could be much higher, leading to usage of over 8000 kWh per year. So simply multiplying one month’s usage by 12 may not give you an accurate answer.

→Related article: How to Save on Power Now!

How do low-user rates work?

Your power bill is made up of two key charges:

• Fixed-rate daily charge – a fixed rate charged every day regardless of how much power used
• Variable usage/per unit charge – a rate that is charged for every kWh used

The way these charges are implemented varies depending on whether or not you are a standard or low user.

Standard user

A standard user consumes plenty of electricity each month. As a result, power companies offer competitive variable usage rates. To balance this they charge a higher fixed-rate daily charge.

Low user

Low users pay a much lower fixed-rate daily charge, but significantly higher variable usage rates. This means that their fixed costs are much lower than those of a standard user. As long as they don’t use much power, their bills will be lower.

Which is better?

As a general rule of thumb, if you use less power than the average amount, a low-user plan will save you money.

But if you use the average (or standard) amount of power or more, a standard plan will be cheaper than selecting a low-user plan.

For example, a quick check of my own address and one provider gave me the following rates:

• Standard user – $2 daily rate + $0.2048 per kWh
• Low user –  $0.30 daily rate + $0.2910 per kWh

As you can see above, as a standard user I’d pay $2 a day in fixed costs, but just 20c per kWh. On a low-user plan, I’d pay only a fraction of the daily charge, just 30c. But I’d also pay around 30c per kWh.

Depending on the power used, the above rates (daily rates + usage) work out to:

As you can see, for low users the savings can be significant. Realistically, a small household of just one or two people may only use a few hundred kWh per month. If so, a low-user plan could offer significant savings.

But the more power you use, the less significant any low-user savings will be. If you’re using a lot of power, the standard user plans are far more favourable. In fact, even when using the average amount of power, at the above rates, the standard user plan is still cheaper.

Keep in mind this is based on the rates I was quoted for my personal address, by one particular provider. Your actual rates, and the benefits they provide, may differ.

Do all electricity providers have low user rates?

Yes, all electricity providers in NZ have low-user pricing. This is because low-user plans are actually a result of government regulation. So no, your power company isn’t offering you cheap rates out of the goodness of its heart.

The legislation was introduced in 2004 to encourage consumers to use less power by offering them cheaper power to do so. It specifies that under a low-user power plan, electricity providers can’t charge more than 30c in fixed-rate daily charges.

Compare electricity providers with Canstar Blue

Finding affordable power involves shopping around. And to help you find the best value electricity retailer, Canstar Blue rates NZ power companies for customer satisfaction and value for money, see the table below for some of the results, or you can click on the buttons below for the full results of our survey, and to compare bundled utility providers.

Canstar Blue’s latest review of NZ power companies compares them on customer satisfaction. The table above is an abridged version of our full results, available here.

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About the author of this page

This report was written by Canstar Content Producer, Andrew Broadley. Andrew is an experienced writer with a wide range of industry experience. Starting out, he cut his teeth working as a writer for print and online magazines, and he has worked in both journalism and editorial roles. His content has covered lifestyle and culture, marketing and, more recently, finance for Canstar.