Electricity bills consume food budget

tabBy Simon Hendery 
Tuesday, 10 June 2014

Grey Power Napier treasurer John Wuts has saved money by switching electricity providers. Photo/Paul Taylor

Hawke's Bay budgeting services say they are dealing with a growing number of clients who are struggling to pay their power bills, including some who are cutting their food budget to pay for electricity.

Budgeting and welfare services in Napier and Hastings spoken to by Hawke's Bay Today all agreed that after accommodation and food, meeting the cost of power was the biggest challenge for struggling households.

"It's certainly a big issue with clients that come in here. There are a lot of people around who struggle to pay their power bill," said Hastings Budget Advisory Service co-ordinator Greta Wham.


Grey Power Napier treasurer John Wuts has saved money by switching electricity providers. Photo/Paul Taylor

"Food, power and rent or housing costs are the three essential things that you have to have. Working on those are the priorities to deal with when working with clients to stabilise their budget," she said.

Kath Curran, chief executive of the Napier Family Centre, said food was often treated as a discretionary item by her organisation's budgeting service clients because it was seen as something they could cut back on.

"It is very tempting to keep cutting back the food money to cope but this is not sustainable as lack of nutrition will eventually adversely affect the family's health," Ms Curran said.

Grey Power Napier secretary and city councillor Maxine Boag said power prices were "a huge issue for the elderly" and a deal Grey Power had negotiated with electricity retailer Pulse Energy had been popular because people were desperate to save money.

"We have one elderly member who told me last year the only time she puts her one-bar heater on is when she has a visitor, the rest of the time she just has two hot water bottles or she just stays in bed."

Grey Power Napier treasurer John Wuts said he had been sceptical about the Grey Power Electricity offer until switching from another provider on to the plan last year. In the first four months on the new plan, he had saved about $100 compared with his electricity spend for the same period a year earlier.

"That may not sound a lot but there are some people who are on the breadline, so an average of $25 a month does make a big difference for them."

Ms Wham said the Budget Advisory Service offered clients a range of advice on how to save on power and cut their bill.

For clients who were behind in their bills, it was a case of trying to work out a payment arrangement with the company.

"It's a matter of discussing with the power companies what they will accept and what the client can afford and coming to some sort of agreement between those two things."

Pre-pay power accounts were one solution for households needing to stick to a budget or that had credit issues due to previous power company debts.

Contact Energy spokesman Shaun Jones said the company had about 3000 customers in Hawke's Bay on its pre-pay service, PrePower, with the number remaining fairly stable.

PrePower customers needed to pay the $140 cost of a pre-pay meter to be installed in order to use the service.

With monthly power bills fluctuating significantly between summer and winter, Contact and other electricity retailers offer payment plans designed to average them out over the year.

Mr Jones said the company worked with customers who were having problems paying, including helping them to seek assistance from budgeting agencies or Work and Income.

The original article can be read here.