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Energy Locals defies industry and cuts consumer electricity rates

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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.

  

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  • MaxG

    As I said elsewhere: I like their ‘social’ business model, where any profit goes back into the community and not in to private coffers!
    People wake up! Check your bill and piss off the big retail leeches. Do not sign lock-in contracts! This means you can change any day; and since Energy Locals does not have lock-in contracts, you can exit if you feel like — so I doubt you will.

    When I left Origin, and they started offering discounts I replied to stick it, solely for the fact that they screwed me for years as a loyal customers with no reward; e.g. like you get with insurers if you have no claim years.
    Mind you, even with their discounts, they couldn’t beat Energy Locals.

    Also, I rather pay (if at all required) more for a social enterprise product, like others pay extra for green energy, with the motivation and satisfaction that the leeches — (who are clearly out to screw you in any possible way [see ACCC inquire into Supply Pricing]) — do not get my hard-earned dollars.

    I strongly encourage you to do the same!

    • Sunbuntu Ltd

      I had never heard of them but I signed up instantly.

      $0.23 per kW-h anytime plus $0.95 daily charge.

      • Adrian Merrick

        Thanks Subuntu, we look forward to welcoming you as a customer. It sounds like you’re in the Ausgrid region, which means by the time you’re through the mandatory 10 day cooling off period your daily charge will have dropped to $0.90 and the solar feed in tariff (if applicable) will have increased to 11.7c (12.87c with GST). Adrian

    • Adrian Merrick

      We hear this Origin story a lot, Max. Their secret drawer of magic discounts is very quickly unlocked once a customer gives notice they’re leaving. Maybe the rest of the time they just forget to offer their customers the best rates. I mean, they’re very busy and all that 🙂

  • Alex Rogers

    I like the sound of them too. Their idea of being a “platform” for community solar groups is very interesting too. I think having a friendly, community minded retailer as the front end for interesting community renewable projects is fantastic, and could be a real enabler.

    • Adrian Merrick

      Thanks, Alex. That’s certainly what we’ve set out to achieve. Cheers, Adrian

  • Mark Roest

    It sounds like they have the same values as California-based Community Choice Energy authorities.

  • Gus Mcgus

    Any plans for Victoria?

    • Adrian Merrick

      Hey Gus, we submitted our application in June last year. We refreshed it with some additional info in May (1,011 pages!). We await news. It’s a different regulator in Victoria to the other States. We all find it very frustrating as (a) half our team is based in Vic and (b) the incremental cost to us launching here is zero – everything is already built and waiting to go. Adrian

  • Travis

    Will be leaving Momentum Energy for various reasons like out of touch management and don’t listen to customers. Like the model of Energy Locals. Will be asking my local friends and neighbours to change as well.

    • Adrian Merrick

      Hi Travis, thank you, we look forward to welcoming you as a customer. We give customers a $50 credit on their bill for every friend or family remember they recommend who joins too. Adrian

  • neroden

    The fixed charge is very reasonable and is similar to the fixed charge I pay in upstate NY in the US.

  • Max Bourke

    When are you going to offer the service…and to buy from us rooftop generators in the ACT?? Your rates are 3 x what I currently get!!!

    • MaxG

      Hard to believe, but you simply stay with whomever you are 🙂