What is really on
your power bill?

A New Zealand power bill is not one number, it is two. There is a daily fixed charge you pay for having a connection at all - typically around $1.50 to $2.00 a day, whether you are home or in Fiji for a month - and a variable charge for each unit of electricity you actually use. Roughly a sixth of a typical bill is the fixed part. The other five-sixths is the part you can do something about, and it is what the calculator above models.

Where the money goes

The shape of a New Zealand household's consumption is unusual, and it is not intuitive. Two categories dominate, and neither is the one people go looking for first.

Space heating is about 30% of it. Our housing stock is poorly insulated by the standards of countries with comparable winters, and we heat intermittently rather than continuously - so a large share of what we spend goes on re-warming rooms that have been allowed to go cold. The gap between heating methods is the single largest cost difference in the whole house. A plug-in heater converts one unit of electricity into exactly one unit of heat, because that is all a resistive element can do. A heat pump moves three or more units of heat for the same unit of electricity, because it is not making heat, it is relocating it. Over a winter that difference runs to hundreds of dollars.

Hot water is another 25-30%. An electric cylinder is a large, near-constant load that most people never think about, because unlike a heater there is no switch to notice. It runs whether anyone is home or not, keeping a tank of water hot against the possibility that someone will want a shower.

Everything else shares what is left: the entire kitchen, all the lighting, every screen, console and charger in the house. That is worth knowing before spending a weekend unplugging phone chargers.

The costs that catch people out

A few loads are consistently underestimated, almost always because they are small but never switched off. A heated towel rail draws only 80 watts, which sounds like nothing - but left running around the clock, as most are, it comes to roughly $250 a year. The old fridge moved to the garage costs about the same, and usually works harder than the one in the kitchen because the garage is cold in winter and hot in summer. A house still lit with halogen downlights is burning around four times what the same light costs in LED.

In the other direction, plenty of appliances with fearsome wattage ratings barely register, because they run for minutes rather than hours. A 2,400W kettle is only drawing that for the ninety seconds it is boiling. Across a year it costs less than $50. The same is true of the toaster, the microwave and the vacuum cleaner. Wattage on its own tells you very little - it is wattage multiplied by hours that produces a bill, which is exactly the sum the calculator above is doing.

Why your rate is what it is

Retail electricity prices in New Zealand vary by more than most people realise - the dearest surveyed centre pays over 40% more per unit than the cheapest. Almost all of that difference is distribution: the cost of the local poles and wires between the national grid and your meter, set by whichever lines company owns the network your house sits on. Dense urban networks spread a largely fixed cost across many connections over short distances. Rural networks spread it across few connections over long ones.

The practical consequence is that you cannot shop for a cheaper network, only for a cheaper retailer sitting on top of it. That is still worth doing - plans on the same network differ by more than most people assume - but it will not move a Balclutha bill to Wellington prices.

What actually reduces a bill

In rough order of how much they return for the effort:

• Change how you heat. Replacing resistive heating with a heat pump is the largest single lever available to most households, and it compounds every winter.
• Stop the heat leaving. Ceiling and underfloor insulation, sealed draughts and lined curtains reduce the heating load before you run a heater at all.
• Deal with hot water. A cylinder wrap, a sensible thermostat setting, and - where the plan allows - shifting the cylinder to a night rate.
• Compare retailers. Free, takes about ten minutes, and typically worth a few hundred dollars a year. It never interrupts your supply.
• Then the small stuff. Timers on towel rails, retiring the second fridge, switching standby loads off at the wall. Real, but smaller than the above.

The order matters. People commonly start at the bottom of that list, because the small changes are the easy ones, and conclude that nothing helps.