I’ve previously written about Powershop, a conceptually different New Zealand retail electricity provider where clients purchase units of power in advance via an online shopping interface. Clients read their own meters, and are encouraged to use this knowledge to reduce their electricity consumption.
When they first arrived on the scene early last year I was quite cautious, but by July last year I had decided to switch over and even at that early stage had discovered that I was making some decent savings on my power costs.
I’ve been with Powershop for over a year now, so it’s time to summarise where I’ve got to.
Generally I didn’t find using Powershop too onerous. There are two new activities that should be done on a regular basis: one is to read your electricity meter and enter that on the Powershop website; the other is to monitor that website for any special deals that may turn up. Sometimes Powershop has specials of packages of units at lower cost (I imagine this is related to the way Powershop presumably buys power forward in blocks from the wholesalers). This latter activity, fun though it is, is by no means compulsory, as usually Powershop’s “regular” priced power is cheaper than that of most other retailers.
I actually quite enjoyed doing both these things. And then there’s the dollar savings. It turns out that these are significant.
As previously discussed, there are two sources of savings to be made by switching to Powershop. The first is relatively easy to calculate: it’s the savings on the price of your power.
In the year through August 2010, we used 9045kWh of power. I know this because I can download all the meter readings I’ve done from the “Meter Readings” section under the “My Account” tab in Powershop’s website.
Next, by looking in the “Monthly Power Cost” in the same area of the website you can see the actual costs of the power you’ve used. (You have to rely on them to do this calculation for you, as working out exactly which units of which power purchased at which price were used in any particular period is not something a Powershop user can track easily). This 9045kWh cost us $1,782.82.
Our previous electricity supplier, Meridian Energy (co-incidentally the owner of Powershop) charges, for the “Economy 24” pricing plan that we were on, a daily charge of $0.9674 and a unit charge of $0.2050. This means our power would have cost us $2,207.33 – but given that we always pay on time we’d “enjoy” a 10% “prompt payment discount” bringing the price down to $1,986.59, a saving of over $200.
In other words, Powershop directly saved us 10% of our power costs over the year.
The second source of power savings is a bit more subjective and harder to measure: it’s the savings brought on through behavioural change. By monitoring power usage you soon get to understand when its being used and why, and you find yourself turning off unneeded lights and heating and sometimes even using the clothes dryer a little less. Yes really.
I think this graph is pretty instructive. It shows our consumption over the last 6 years ending in August; the blue bars for when we were with Meridian, the last bar for Powershop.
As you can see, our consumption in the last year has been significantly below the average seen in the five previous years. This could well be due to a number of factors outside of behavioural change, such as
- the weather;
- how much firewood we have on hand (in winter 2009 we didn’t have enough); and
- the new insulation we’ve put through the house1.
Personally I don’t think we would have gotten around to changing our behaviour or doing the insulation without the catalyst of Powershop’s approach to electricity, so I’m happy to ascribe all these savings to their influence. Your view on this may differ.
Anyway, if the year ending August had been an “average” consumption year we would have used 10085kWh, which would have cost us $2,178.55 after the 10% “prompt payment discount”, almost $400 more than what we actually paid through Powershop.
This is an 18% saving compared to what our average consumption would have cost at our previous power supplier!
So, to summarise:
- our power is 10% cheaper when bought through Powershop
- but on top of that, we used 10% less power than our previous average, meaning that our total savings for the year were 18%, or almost $400!
I have concluded that for us, Powershop has been a total success. Not only does it have cheaper prices, its very nature drives awareness and behavioural changes leading directly and indirectly to still further cost savings.
There’s not many power companies you could say that about, is there.
1 Incidentally, this was done with the assistance of the Government’s subsidy for home insulation, plus a grant from Powershop, which together brought the price for this work down significantly. Powershop’s parent, Meridian, own insulation installer Right House, and both Meridian and Powershop were offering clients assistance to get the work done through Right House.