Energy Locals takes aim at “big three” with wholesale electricity offer

Retail power upstart Energy Locals has laid down the gauntlet to Australia’s big three market players, with the launch of a new membership service that offers electricity at “wholesale” market prices.

Customers who sign up to the Member Promise 2020 plan can pay a $4.50 per week membership fee, and then get their electricity at the same “direct rates” that Energy Locals pays.

Assuming a customer is from the Essential region of NSW, without solar, and uses 7,000kWh per year, the annual price would be $2267, Merrick tells One Step – including the weekly membership of $4.50.
The specific breakdown is (excl GST):
Membership $4.09/week
Daily charge: 123c/day
Usage: 19.99c/kWh
Incl GST:
Membership $4.50/week
Daily charge: 135.3c/day
Usage: 21.99c/kWh

As part of the deal, Energy Locals – which currently operates in New South Wales, the ACT and south-east Queensland – will source its NSW energy from Cape Byron Power, a bio-generator that makes electricity from sugar cane and sawmill waste.

Another perk of the offer is that $1 from the weekly membership fee goes towards an Energy Locals charity partner of the customer’s choice, including the Cancer Council and Surf Life Saving NSW.

Energy Locals founder and CEO Adrian Merrick hopes that, as well as winning more customers away from the “big three,” the new plan will start to change the dynamic the sector, which has seen prices increase by 20 per cent while company profits have, in some cases, tripled.

“Addressing the cries from Canberra for more transparency and honesty in the energy sector isn’t hard,” Merrick said, “unless you’re a big energy company.

“As a country, our demand for energy isn’t increasing, yet prices continue to hurt customers where unjustified bill increases are negatively affecting their way of life.

“It seems to us that big energy companies are not being honest about why.

“(Our) plans have simple rates that can easily be understood. There are no inflated tariffs to create fake discounts. It’s just clean energy at a great rate,” Merrick said.

“Our earnings are the $4.50 per week inc GST, and of this we give $1 to our (charity) partners,” Merrick added in an email to One Step.

“This is totally different to the big energy companies that offer a discount off a number they invent, with the intention of reducing the discount or increasing the headline price at the earliest opportunity so they can increase their profit from each customer.

“We earn no money on customer usage, meaning that we have the same incentive as customers to help them lower their usage and get onto the best tariff structure for their circumstances.

“For the wholesale component, if we pay 9.5c to a generator, including loss factors, then we put 9.5c into our tariffs as the wholesale component.

“Once retailers rely on earnings from customer usage it takes away their incentive to do the right thing. No customer wants to pay for excess grid usage,” Merrick said.
The Members Promise plan is currently available in NSW, south-east Queensland and the ACT.

Energy Locals is currently working on plans to launch in South Australia and Victoria, too – although in the case of the latter state, the company says it is still waiting for the green light from the Victorian regulator.

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