Flick Electric Review

Updated 13 March 2019

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Review Summary of Flick Electric 

• Flick is a nationwide electricity company promoting itself as the friendly alternative to fixed-price electricity from established companies like Contact Energy, TrustPower, Genesis and Mercury.
• Its unique selling point is that you know at all times what your bill is going to cost you as you use electricity. The price of a unit of electricity goes up and down every 30 minutes, and Flick charges you the market price (or 'spot price' as it's commonly known as.
• Customer numbers are 20,000+ and the company is actively looking to take on more customers from all over New Zealand. 

First Steps - What is a "spot price" or "market price"?

• To understand how Flick works, understanding the "spot price" of electricity is essential.
• When you use electricity, Flick charges you the spot price plus a small fee per unit used.
• The spot price is what Flick pays the electricity generators to buy the electricity you use. This electricity could come from a hydro plant, a geothermal plant or a wind farm for example. 
• If there is a shortage of electricity (i.e. low lake levels) or demand is extra high (i.e. a cold winter or even a short cold snap), the law of supply and demand force the spot price higher. This means you'll pay more per unit during such times. The spot price changes every 30 minutes, and Flick uses a smart meter to measure it.
• The graph below shows the movements in the spot price from 2010 to 2018. Flick made the news media in 2017 when a 'dry winter' saw lower than usual rainfall, and as a result lower lake levels and higher electricity prices. This directly impacted Flick customers who pay the spot price. While this unfamiliar situation led to concern among some customers, it's important to keep in mind that dry winters are not common (Flick Electric themselves outlined a guide to the dry winter occurrence) and that a higher spot price does not generate any extra profit for Flick based on the model it operates.
• There are two significant differences between traditional power companies - Flick customers are billed every week, and the price you pay per unit of electricity used is not fixed. 

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New Zealand Electricity Spot Price July 2010 to July 2018. Source: emi.ea.govt.nz/Wholesale

Choosing to be a 'Low User' vs 'Standard User'
The government introduced regulations in 2014 to give electricity consumers assistance with lower prices and to encourage more responsible energy use. Because of this, you have to choose to be either a Standard User or Low User. What you pick depends on what you pay, as Flick offers two plans. 

Understanding Flick's per unit fees

• Standard users pay a Flick fee of 42¢ per day, and 1.58¢ per kWh used.
• Low users pay a Flick fee between 3.15¢ - 3.62¢ per kWh (the exact fee depends on where you are based). There is no daily Flick fee. 
• Important: The prices above are the Flick margins, not the price per kWh consumed. The spot price of electricity is the same for both Standard and Low users, but the final bill will be different based on your user type. This is because Standard and Low users each have their own fees for different components of your electricity, such as network usage, metering usage and the Flick fee, which all vary based on your user type. For example, Low Users incur a variable metering charge based on the kWh consumed, whereas Standard users do not. Electricity billing is complicated, but Flick lets you know if you're a Standard or Low user quite easily:

• You are a Low User if you consume less than 8,000 kWh and are north of Christchurch (or 9,000 kWh if south of Christchurch). 
• If you consume above these limits, you are classed as a Standard User. 

Picking the right option for your needs

• Every energy consumer is different, and the pricing options make 
• We suggest checking out the Flick Pricing based on your region
• We have not performed a review of any pricing comparison, and instead emphasise that Flick's pricing is totally different to other power companies; there are no fixed rates and no margins. Instead, Flick's billing is based on usage and fees, as outlined next. 

Flick fee composition for each unit of electricity consumed. source: flickelectric.co.nz

What makes up a Flick Electric bill?
What's really important to know that there are six components of Flick electricity bill; the spot price of electricity is only one component. For this reason, a 20% increase in the spot price does not directly lead to a 20% increase in your power bill. We explain the multiple components that make up your bill below:

1. The spot price - as outlined above, this changes every half hour based on changes in supply and demand, and you are billed in real time for what you use. 
2. Transmission and distribution costs - As Flick doesn't own the lines your power is transmitted on, a portion of what you use pays the transmission companies for their service. 
3. Metering - this is the cost of renting the power meter at your property
4. Flick Fee - this is what Flick charges for the service they provide. You are charged a 'Flick Daily Charge' and a 'Flick Variable Charge', although this will vary as to whether you are on a 'Standard' or 'Low User' plan.
5. EA Levy - this is a charge from the Electricity Authority to fund its running costs as the independent energy regulator for New Zealand. The levy is a few cents per  MWh (megawatt hour) used, so it's not a very big number for the majority of households. The same levy rate is charged to anyone consuming power as a customer, so there is no difference in pricing between electricity companies.
6. GST - GST is applied at 15% to all the above. 

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Will you save by joining Flick vs using a traditional energy company?
We can't be certain as every situation is different, but In the long run, we believe you will given the pricing model the company operates. To give prospective customers some idea of potential savings, Flick offers the option to upload a bill to calculate what you would pay with its prices. The limitation of this is that it doesn't give an annual comparison, which is more accurate as an indication of savings.
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Flick - Most Suitable Customers

Best For: 

• Homeowners and renters with no immediate plans to move home; the (generally) higher prices in winter will be compensated by the warmer months when electricity is a lot cheaper. 
• People who consume the majority of their power during off-peak periods, such as during the day (10am - 4pm as an example). 

(Possibly) not suitable for:

• Short-term rentals; the electricity price ups and downs may not even out and you may pay more overall depending on the time of year vs a fixed-price electricity supplier. However, Flick has offered promotions that guarantee you won't pay more if you switch - check to see if any are running if you're looking for a short-term solution. 
• People who use the majority of their power during peak periods, such as early morning and evening when the spot price will generally be higher. 
• Anyone who prefers to know their per-unit price well in advance as a matter of personal choice.  

Know this - every living situation is different and we suggest any prospective customer contact Flick before signing up. Their sales team can accurately assess your expected usage and help you compare with a greater degree of accuracy. 

Standout Features:

1. Flick is adamant that in the long run switching to them will be cheaper, advertising the tagline "New Zealand's Fairest Power Deal". We would agree - all prices and fees are transparent, with slimmer margins than the long-established competitors.
2. There are no contracts, so you can switch in and out as you please.
3. There is no early payment discount as traditionally offered by other power companies, and we think is fair to everyone.
4. Flick is green-orientated, and the 'Choice' tab on its app illustrates where the grid's power is being sourced from at any time, and its effect on the environment. This is to encourage customers to use electricity when the sources are more environmentally friendly.  

What Others Are Saying

Stuff.co.nz reported in 2017 that Flick customers had on average saved money for 102 weeks before wholesale prices spiked when bad weather hit. Flick's CEO commented that "customers needed to understand that wholesale energy prices fluctuated and that (Flick) is not perfect for everyone; in certain situations, bills may be more expensive (in periods of low electricity supply). 

Stuff.co.nz reported in 2017 quoted Flick's CEO in saying that in the long run, customers are better off with spot [pricing]. It just means they have to ride out some of these price variations."​

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The Bottom Line

• Flick wants to be in New Zealand for the long run. It's rapidly expanding coverage on a monthly basis.
• Signing up to Flick is a long-term commitment if you want the best value - prices go up and down, 
• The app is constantly updating you on prices, but there is a risk it can 'possess' you and make you paranoid about the current price and whether you should turn on a heater or run the washing machine. We think the app is best to indicate billing but shouldn't dictate how you live.  
• You will need a 'smart meter' to be a Flick customer - and Flick doesn't offer them to new customers. 

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10 'Must Know Facts' about Flick

Wholesale or "spot" prices change every 30 minutes, and you'll pay MORE in winter

We believe Flick is very open about their business model; there are no hidden fees and what you pay is what the market price is plus a per unit usage fee and a fixed daily fee if you are a 'low user'.

The price you pay every week follows the rules of supply and demand - electricity is more in demand in winter as people heat their homes, so the price goes up. In summer, demand is much lower, so you'll pay less.

Know this: The price of power is entirely out of your control, and it's also out of Flick's control. Flick advertises that you'll pay less overall year after year, given the low margins they charge per unit. The Flick approach is a very different model to how other power companies operate - in most cases you'll pay a stable charge per unit of electricity year-round. This price factors in the ups and downs of the wholesale power market. 

You will pay your power bill every week, on a Thursday and there are prompt payment discounts

Most power companies will bill you for a month, which during winter can make for a fairly hefty bill. Flick bills every Thursday for the power you used in 9-16 days earlier. 

This may not suit you if you get paid monthly or fortnightly, and we believe Flick has this policy to limit its losses from people who don't pay their bills.

If you prefer to have flat bills, Flick offers a free program called Volt which lets you overpay every week and build up a credit balance. The credit balance you build up is then used to help with larger bills, meaning what you pay is much more consistent. And if you decide to leave Flick, you are refunded your Volt balance once your final bill is settled. 
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Unlike almost every other power provider, Flick does not offer prompt payment discounts in any form. 

Flatting? Flick's weekly bill can be extra work when it comes to arranging flat finances as most other bills (Sky TV, Netflix, internet etc.) will be paid monthly.  
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If there is a massive power shortage, you could (and probably will) pay more than what other power companies charge

It's inevitable - New Zealand periodically suffers low lake levels, and because 60% of our electricity is generated from hydroelectricity, the price of electricity jumps up. News media report heavily on the price of electricity during a drought, and if you're with Flick, you'll see those prices directly. Because Flick charges customers the wholesale price and not an agreed flat price, power shortages will translate to relatively higher bills. 

Leaving Flick when there's a drought

• While droughts don't usually last too long, nothing is guaranteed and week after week of sky-high power bills is not something you need to put up with. 
• Most other power companies offer year-round promotions with fixed prices not influenced by any current power shortage. Signing up to one will usually see your bills will return to a constant level. Flick customers can quit and be with a new supplier within hours. 
• Money Saving Tip: If you are switching, tell the potential power company you're leaving your existing provider and ask for a discount - many offer bonuses such as $100 credits and/or short-term contracts.   

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Flick doesn't fix you into a contract

Some power companies charge connection fees and make you sign a contract for a minimum number of months. Flick does not - standard use customers pay a daily charge to be with Flick (usually around $0.50),  and you are free to leave whenever you want without a fee. 
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Watch out - prices do NOT include GST

Flick promotes itself as being transparent and fair - we raise an issue with the charges advertised and on the Flick app not including GST so the weekly bill may not reflect what you saw on your screen. 
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You pay ONE price for getting power to you, but you'll see where your money goes

Electricity isn't simple, and there are a lot of companies involved in getting power from its source to your home. This includes:

• Generation costs – this is the cost to produce the actual electricity, and its a 'good' that is traded on the wholesale market (also known as the 'Spot price'). Flick, like all other power companies, buys its electricity on this market.
• Transmission/distribution – this is the cost of moving the electricity from where it's produced (i.e. a hydro station) to your home. This is also known as 'network charges'.
• Metering – this the cost of renting your home's smart meter (you never own a smart meter despite it being attached to your home).
• Electricity Authority Levy – this is the cost that the Electricity Authority charges anyone consuming power; the level contributes towards the Authority regulating the electricity industry
• Flick Fee - in addition to the fees above, there is also a 'Flick fee' - this is the cost of having Flick provide their service. Flick adds this to every electricity unit consumed, currently at these rates:

1. Standard users - 1.58¢ per unit and 42¢ per day
2. Low Users - 3.15¢ to 3.62¢ per unit, no daily charge​

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If you struggle to budget, Flick may not be best for your needs

Flick customers generally pay very little in warm months but as it gets cold budget-busting bills can start. If you struggle with bills, a flat-price electricity provider may be better for your overall finances. You'll pay more overall, but what you pay month to month will most likely be more consistent. In summary, there will be no spikes. And unlike Flick, most other providers bill monthly which is something to take into consideration. 
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Winter days and nights can be punishing financially

Flick's app may torment you during winter with its price of power alerts and can make you spend time worrying about the price of power every time you want to do something like turn on a heater or have a shower. In the summer the power price will be a lot lower, but when you need to use a lot of electricity (i.e. for cooking and heating) it will cost more as there is more demand. 

If you have better things to worry about than the price of power and want to put on a heater without waiting for the 'right price' or feeling guilty for doing so, Flick's app is probably not for you. 
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You need to have a 'Smart Meter' to sign up with Flick. If you don't have one, Flick can't give you one, so you'll need to have another provider install it first.

Because Flick records your power use every half hour of every day, you'll need to have a smart meter. Confusingly, Flick can't install one for you so you won't be able to sign up. If this is you, Flick recommends you arrange an upgrade through another retailer and then switch over to them. 

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Your lifestyle and daily routine influences what you'll pay for power

Flick's power prices as all demand-driven. At 7.30am on Monday there are millions of people getting ready for work and school, and at 6pm everyone is at home cooking dinner. The price of power at those times increases much more than say at 1am or 10pm when almost everyone is asleep and businesses are closed.

Flick charges you directly what the spot price any time you use electricity;  how and when you use electricity is what you'll pay. If you run a dishwasher, washing machine and heat pump at 12am that will be a lot cheaper than 6pm for example. 

Know this: Variable rate" does not mean "cheaper electricity, all the time
Flick is arguably as honest as power companies come, and does its best to educate prospective customers on the way they charge. If a customer signs up in summer, they'll most likely pay much less than their previous provider. All pricing is variable based on demand, and in summer, demand is low. But the market price is up and down twice an hour, and if there is a shortage of electricity for any reason, Flick customers will immediately pay more.

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Flick Electric: Our Conclusion

• We think Flick is a welcome entrant to the electricity market, and we're pleased it's out there challenging the incumbents with low margins and a commitment to pricing transparency. 
• Flick is a great long-term service that will almost certainly save the average household money in a given year.
• With their optional app, Volt, you can put your account into credit by overpaying during the cheaper weeks to give you a cushion for when the prices of power rise (i.e. winter). 
• Flick won't be for everyone, but we believe it's a strong choice for a savvy homeowner looking to save money on power in the long term. 
• The underlying objectives of Flick appear to be fair and green energy, putting the customer first by explaining in detail every aspect of how the business works. We believe this is unique for an energy company in New Zealand.