A small energy retailer in Melbourne has been “overwhelmed” by interest since announcing one of Australia’s first ever fixed cost electricity plans.
Sumo Power, which only launched in Victoria in 2015, is offering new and existing customers the chance to switch to its “All You Can Eat’ electricity plan in a bid to remove the dreaded bill shock that can hit households after times of unusually high energy use, or sometimes just out of nowhere.
Based on six months of previous billing history, Sumo Power will quote customers a price for their electricity for the next 12 months, with payments made upfront or in two instalments. The amount remains the same regardless of how much power a household actually uses.
The plan represents a different approach to energy billing, seemingly borne out of consumer frustration with often confusing plans and fluctuating costs. As a result, Sumo Power has reported three times the number of enquiries and a 10 fold increase in traffic to its website.
CEO Domenic Capomolla told Canstar Blue: “We wanted to be able to compare the All You Can Eat plan to an insurance premium, which many people pay upfront, and also move away from thinking of this as a traditional energy product. All You Can Eat is different – one price, no more bills. We’ve had an overwhelming response from both new and prospective customers for All You Can Eat and our other products.”
Mr Capomolla said the All You Can Eat electricity plan was conceived six years ago when smart meters began to be installed in Victoria, but he doesn’t expect other energy retailers to follow suit quickly.
“We waited until I could start my own energy company to launch this product because i believed the market was crying out for price certainty,” he said. “Basically, this is why we started Sumo Power. The energy market was full of tired old thinking, and still is. There doesn’t seem to be many innovators in energy. Smart meters also make the All You Can Eat product much easier and accurate to price. Will others follow? I hope so, but suspect it may be six months before another company rolls this out.”
Changing the way we pay for power
The All You Can Eat plan was revealed in May, a couple of months after energy giant Origin announced a similar fixed cost energy offer. The ‘Predictable Plan’ works in much the same way as the Sumo Power contract, with customers quoted a fixed amount to pay every month or quarter, regardless of their energy usage.
The question mark hanging over these plans is the concern that customers could be slugged with a significant settlement bill at the end of their contracts, making up for all the excess power they may have used during the term. However, both Sumo Power and Origin insist this will not be the case, unless households are found to have abused the terms of the agreement, for example by running power lines to other properties.
It seems Australian consumers have become sceptical of energy companies, especially when offers that seem genuinely helpful come along. But in the case of the All You Can Eat deal from Sumo Power and the Predictable Plan from Origin, it really is a case of what you see is what you get.