Multi-rate tariff test on power

Hundreds of thousands of Genesis Energy customers may be offered the opportunity to pay "multi-rate tariffs" if a trial now under way in Waitemata proves a success.

Genesis, the country's largest electricity retailer, has installed smart meters in 230,000 homes that can check customers' electricity usage every half hour.

It hopes that by selling electricity at different prices at different times of the day, it will be able to encourage customers to use less electricity at peak times, saving both the company and its customers money.

Spokesman Richard Gordon said Genesis wrote to about 2000 customers in December to invite them to join the trial and 230 had accepted. They would get their first new bills at the end of the month.

Genesis believed customers that switched to the new plans could expect to save about $200 a year on average, and potentially more if they changed the times of day they used electricity.

All Genesis customers with smart meters are able to check their electricity consumption online.

Triallists will pay:

Peak rates between 4pm and 9pm, Monday to Friday.

"Shoulder rates" between 7am and 4pm, and 9pm and 11pm, Monday to Friday, and between 7am and 10pm on weekends.

Off-peak rates at all other times.

Even though 230 households have joined the trial, Gordon declined to reveal what the tariffs were.

"That is something we would like to keep confidential at this stage. Despite what some people might think, we operate in a very competitive market."

Gordon said there was no set end date for the trial and it would look closely at the results before deciding how multi-rate plans could be rolled out to the "mass market".

Waitemata was chosen for the trial because it was the first place Genesis began installing smart meters.

Many electricity users have two meters that allow them to pay lower rates for hot water heating at night, but Genesis' multi-rate plans were quite different and a lot more sophisticated, he said.

Because Genesis had the largest number of smart meters installed, strong uptake could significantly lessen the load on electricity generators and distribution infrastructure.

However, Trustpower spokesman Graeme Purchas – a sceptic of the benefits of variable pricing – said the fact that only about one in 10 customers had volunteered to join Genesis' trial "tells you something about the level of interest".

Purchas said many people were fed up at being hounded by electricity retailers to switch provider and checking for the cheapest deal. "People want their lives to be comparatively simple."

Trustpower was trialling smart meters "but right now trying to get the best out of a smart meter to save a few dollars a week means significantly changing your lifestyle and people don't want to do it."

SmartCo, a consortium of electricity lines companies, confirmed plans in November to install 500,000 smart electricity meters over the next three years at an expected cost of $200 million to $250m.

Its meters are expected to contain chips that would let them communicate directly with intelligent home appliances, such as fridges, which could be programmed to defrost when demand for electricity was low.

That initiative has been warmly welcomed by Parliamentary Commissioner for the Environment Jan Wright.

However, some campaigners fear peak pricing could encourage vulnerable people, such as the elderly, to skimp on home heating when they most need it, at times of high electricity demand.