The Electricity Authority Levy covers the cost of operating the Authority, plus the costs of the contracted service providers who operate the electricity market and system. The levy also covers the Energy Efficiency and Conservation Authority’s (EECA) electricity efficiency functions.

The Electricity Authority has held its own operating costs flat for a number of years. EECA has also held its costs relating to electricity efficiency funded by the Levy.

The costs that the Levy covers increased 4% for the 2015/16 financial year due to:

  • More investment in the ‘Facilitating Consumer Participation’ programme which includes the What’s My Number campaign. This campaign provides consumers with information about the potential savings that could be made on their electricity bills. The campaign was launched in 2011 and 1.5 million electricity switches have been undertaken through the website. The average estimated saving identified through the website is $162. 
  • Increased costs of the service providers that operate the electricity market. The Authority has recently re-tendered four of these service provider roles, and there will be some resulting cost reductions factored into the Levy rates applicable from 1 July 2016. In addition, the Authority is currently in the process of renegotiating its service provider agreement with Transpower. The aim of these negotiations is to establish services that are more aligned to the Authority’s statutory objective, and that seek to provide a better and more transparent balance between the services provided and cost.

On a typical consumer bill, the Levy equates to around 0.4% of the total.

Levy rates are set each year and come into force on 1 July. Information about Levy rates is published in the New Zealand Gazette and on the Electricity Authority’s website.

As the Levy is only a very small portion of the total price that consumers pay for their electricity, not all retailers separately identify this on their bills or notify their customers when the levy changes. Individual retailers make their own decisions about when, and to what extent, they will pass through changes in the Levy to their customers. Levy increases of more than 4% could indicate that movements from previous years have not been passed through.

The Electricity Authority is committed to ensuring that the Levy collected is used as efficiently as possible for the long term benefit of consumers.

More information on the Levy is available here: http://www.ea.govt.nz/about-us/what-we-do/how-were-funded/levy-rates/

We encourage all consumers to check that they are getting the best deal on their electricity by checking What’s My Number (external link)