New Zealand electricity retailers offer several plan types with different pricing structures and contract terms. Understanding the difference helps you choose a plan that suits your usage habits and risk tolerance.
Fixed-term plan: Locked-in rate for 12–24 months. Good if you value certainty and current rates are attractive. Break fees apply if you leave early.
Open/variable plan: No contract, rates can change with notice. More flexibility, but less price certainty.
Spot pricing: Rate changes every 30 minutes with the wholesale market. Lowest average cost potential for flexible households, but occasionally expensive.
For most households: An open-term variable plan from a competitive retailer is the sweet spot — good pricing with the flexibility to switch if a better deal appears.
Plan Types Explained
Fixed-Term Plans
A fixed-term plan locks in your unit rate and daily charge for a set period — typically 12 or 24 months. During this period, the retailer cannot increase your rates (some contracts allow index-linked increases — check the fine print).
Advantages:
- Rate certainty — you know exactly what you’ll pay
- Protection from wholesale price spikes
- Sometimes offered with sign-up bonuses or lower introductory rates
Disadvantages:
- Break fee if you switch before the term expires ($50–$200 typically)
- If market rates fall, you’re stuck paying the higher contracted rate
- Less flexibility if your circumstances change (moving house may trigger a fee)
Best for: Households that value predictability and plan to stay at the same address. Makes more sense when wholesale prices are elevated (locking in a deal before further rises) than when prices are falling.
Open-Term (Variable) Plans
An open-term plan has no fixed contract period. Rates can change, but the retailer must give advance notice (typically 30 days). You can switch to another provider at any time with no break fee.
Advantages:
- Full flexibility to switch whenever you find a better deal
- No financial penalty for moving house
- Can take advantage of market pricing falls immediately
Disadvantages:
- Rates can increase with notice
- May not offer the lowest upfront rate (fixed plans sometimes offer discounts to secure customers)
Best for: Most households. The flexibility to switch is valuable — competitive retailers tend to keep variable rates sharp to retain customers.
Spot Pricing Plans
Spot pricing plans (offered by Flick Electric and some others) pass the real-time wholesale electricity price directly to you. The price changes every 30 minutes and can range from near-zero (overnight, weekends, high renewable generation) to several dollars per kWh during demand peaks.
How it works:
- You pay the wholesale spot price + a fixed retailer charge (typically a subscription fee or per-kWh levy)
- Very cheap during off-peak periods — especially overnight and weekends
- Expensive during peak demand (winter evenings, cold snaps)
Advantages:
- Can be significantly cheaper than fixed rates for flexible households
- Full price transparency
- Benefits increase with smart meter access
Disadvantages:
- Unpredictable bills — hard to budget month to month
- Price spikes in dry years or cold winters
- Requires willingness to shift usage to off-peak periods
Best for: Households with flexibility — those who can run dishwashers, washing machines, and EV charging overnight or on weekends.
Time-of-Use Plans
Some retailers offer time-of-use (TOU) plans with different rates at different times of day — typically:
- Off-peak rate: overnight and weekends (cheap)
- Peak rate: weekday evenings 5–9pm (expensive)
- Shoulder rate: daytime weekdays (medium)
These plans require a smart meter. They can save money if you actively shift usage away from peak periods, but cost more if you use a lot of power during peak times.
Hour of Power (Electric Kiwi)
Electric Kiwi’s “Hour of Power” feature gives you one free hour of electricity per day during off-peak periods (typically 9pm–7am on weekdays, all day weekends). You select the hour via their app.
This is essentially a free usage window of 365 hours per year. For a household that concentrates usage into this hour (running the dishwasher, charging the EV, etc.), it can be worth $150–$250/year in saved electricity.
Which Plan Is Right for You?
| Your situation | Recommended plan type |
|---|---|
| Want the lowest bill, flexible with timing | Spot pricing (Flick) or Hour of Power (Electric Kiwi) |
| Want certainty, hate price surprises | Fixed-term plan |
| Moving house within 12 months | Open-term variable (no break fee) |
| Renting and may move | Open-term variable |
| Large household with EV | Time-of-use or spot pricing |
| Don’t want to think about it | Open-term variable, check Powerswitch annually |
Checking Your Current Plan Type
Look at your latest power bill or your online account. Your plan details should show:
- Plan name
- Whether it’s fixed-term or variable
- Unit rate and daily charge
- Contract end date (if fixed)
If your fixed-term deal has expired, you may have automatically rolled onto a standard variable rate — which could be higher or lower than what you were on. It’s worth checking Powerswitch to see if better options exist.