Low fixed charge plan uptake by year and annual consumption

  • Last post 28 June 2021
Matthew Keir posted this 26 May 2021

Following the recommendation in the Electricity Price Review, MBIE has investigated and consulted on options to phase out the low fixed charge (LFC) regulations. The Authority provided MBIE with information to inform and support their analysis and options development. 

Two charts are presented below to highlight some of these insights and inform other interested parties.

Figure 1: Distribution of consumption for primary residences supplied through LFC and standard plans - 2020

Figure 2: Proportion of primary residences supplied through LFC plans over time


1. Retailers are not required to record primary residences and the approach varies significantly across the industry. Some ICPs were filtered out from these results due to inconsistencies or lack of consumption data, so the counts will be less than the total primary residences. LFC status is at 31 Dec 2020 and consumption data is for 2020. LFC plans must be offered to primary residences but are not required to be offered to holiday homes etc. 

2. Annual consumption thresholds of 8000kWh and 9000kWh (in the lower South Island) where consumers will be better off selecting an LFC plan are set in the regulations. The figures above only present aggregated national results.

Attachment: The attached file includes the data presented in Figure 1.

Attached files

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msouness posted this 06 June 2021

If the LFC is not to be discontinued, at the very least, it should be rewritten to allow for the full recovery of fixed metering costs.  This would allow retailers to achieve positive margin on these customers, and perhaps even increase competition for the LFC customers.

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  • mtomecki
jofajafa posted this 28 June 2021

It would be interesting to see the figure 1 breakout between the northern 8,000 kWh boundary zone and the southern 9,000 kWh zone, and perhaps also a combined graph as an offset from the boundary. It looks like something like a third of those on Standard plans would be advantaged on LFC plans.With 57.5% of plans being LFC and that low tail, perhaps as many as 70% of households sit below the LFC usage boundary. One more point in favour of LFC removal I believe.

Is there underlying data available to us for this Matthew?