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Published on July 10th, 2017 | by Giles Parkinson

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New Australian Electricity Retailer Energy Locals Defies Industry By Cutting Consumer Electricity Rates

July 10th, 2017 by  


Originally published on RenewEconomy.

Newly established electricity retailer Energy Locals has defied the sharp jump in electricity bills across the country and announced a fall in its electricity prices for consumers in NSW and Queensland, and a lift in its solar feed in tariffs.

Energy Locals – a community focused retailer that began operations in January this year – says its electricity prices for households in NSW will fall 2.1 per cent, prices for businesses will drop 2.6 per cent, while household and business customers in Queensland will enjoy a 6.9 per cent cut and 10.3 per cent respectively.

The rest of the industry has announced price hikes of 19.6 per cent, almost entirely due to the big jump in wholesale electricity prices over the past year.

But Energy Locals says it able to deliver the price cuts for two reasons. Firstly, it deliberately locked in its wholesale prices last November until June next year, so has been unaffected by the price jumps since then and the manipulation of the markets by big generators.

Secondly, it charges a fixed service fee of $12.50 per customer per month, which is built into the normal rate, rather than making money from margins on the amount of electricity sold.

Founder and CEO Adrian Merrick, a former senior executive with EnergyAustralia, says this means his company’s incentives are aligned with its customers.

“We don’t have tired and expensive old power stations to keep in operation and we don’t have shareholders that are demanding their money back. So if the costs we pay reduce, our customers will benefit from that,” he said.

He said many energy companies seem to jump on the bandwagon at price change time. Even if they don’t have increased prices, many can still pass on large price increases through the safety of the pack. 

“By not screwing customers, we actually stand out from the crowd in Australia’s energy market. How ridiculous is that?”

The company has a strategy to “kill the traditional energy model from within” and has obtained a retail licence to allow disruptive business models and technology companies to access the market. It recently signed a partnership with peer-to-peer trading startup Nexergy.

Energy Locals is also increasing its solar feed-in-tariff to 12.87 cents a kilowatt hour in NSW and 12.1 cents in Qld. 

“Solar customers deserve a better deal for the investment they’ve made. Too many retailers are earning a decent margin between what the solar’s worth to them and what they give the customer,” Merrick said.

“We want to change that and we also want to make the payback more attractive for those who are thinking about getting solar.”

Merrick this week was highly critical of the established energy utilities, accusing them of deliberately bidding up prices in the past year.

Energy Locals launched in the market at the start of 2017 and has already been making an impact by refusing to play the normal industry games of offering too-good-to-be-true discounts and offshore customer service. 

The company has a strategy to “kill the traditional energy model from within” and has obtained a retail licence to allow disruptive business models and technology companies to access the market. It recently signed a partnership with peer-to-peer trading startup Nexergy and is also partnering with Sonnen.

Energy Locals’ new prices take effect from 21 July and applies to all existing and new customers.

Reprinted with permission.





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About the Author

is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia's energy grid with great interest.



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