In the wake of deregulation, the Australian energy market has become a rapidly changing and hugely competitive playing field, with all manner of weird and wonderful retailers emerging to try and steal a piece of your power bill pie.
Every year since price restrictions started to be lifted across the states, the Australian Energy Regulator has received and accepted applications from dozens of new energy companies, and in this article we examine three of the newest kids on the block – all promising better value and a fresh approach to electricity retailing.
In August and September 2015, Mojo Power, 1st Energy and Urth Energy all received authorisation to sell electricity across New South Wales, South Australia, Queensland, the ACT and Tasmania. So what makes them different? To stand out from the crowd, this new generation of energy providers needs to offer a new proposition – something that the big three retailers (AGL, EnergyAustralia and Origin) and the growing number of second-tier challengers (such as Red Energy, Lumo Energy and Simply Energy) don’t already. That means new, innovative plans that give consumers not just more choice, but a greater variety of options.
Mojo Power has launched in NSW and is currently serving the Ausgrid network area from Newcastle to Wollongong and about half of greater Sydney. Its unique selling point is that it offers customers electricity at wholesale prices – all they need to do is purchase one of three different ‘energy passes’ starting from $30 per month. Each plan gives customers wholesale electricity rates, plus a smart meter upgrade – if they don’t already have one. The EnergyPass details are as follows:
- Standard: For $30 per month, customers get electricity usage data from up to 48 hours ago.
- Plus+: For $35 per month, customers get live electricity usage information.
- Premium: For $45 per month, customers get live electricity usage information and unlimited phone support in business hours.
Mojo Power believes households with above average electricity usage, such as families in large homes with multiple bedrooms, stand to benefit most from its plans.
“Unlike other retailers, we’re not dependent on how much energy our customers use. This allows us to partner with our customers to help them save and use less energy,” Mojo Power says. “This seems fairly sensible and logical when you think about it. But the fact is that, until now, no one has. Mojo is the first energy retailer globally to sell electricity to households in this way – in fact we’ve lodged a patent application to this effect.”
Mojo Power promises a “fairer way of accessing and paying for electricity” with no estimated bills or lock-in contracts. It also insists that being able to monitor your electricity usage through its web app means no more bill shock.
Also launched in NSW, 1st Energy identifies itself as a leader in quality customer service and encourages Australians to break free from being just another number in the system. It promises competitive rates and outstanding service, with simple plans, no hidden fees or charges and no broken promises. 1st Energy also promises to waive exist fees if it can’t match an offer from another retailer. Its residential plans are as follows:
- Maximiser 20%: 1st Energy says its 1st Saver 20% plan comes with a 20% pay on time discount off usage charges, a 24 month contract with “lifetime benefits” (meaning the discount won’t be removed at the end of the term), plus its price match and service guarantees.
- Solar 16%: This plan comes with the same features as the one above, but with a 16% pay on time discount off usage charges.
“We believe sales customer service should be professional and straight forward,” 1st Energy says. “We may not be the biggest energy retailer but we do plan to be the best. Our online self-service gives you easy to access information, we guarantee to reply to any emails within a day and our passionate account managers are ready for your call.”
1st Energy also promises no credit card fees and says: “We’re a new company and we work hard not to be like all the others.”
Urth Energy describes itself as a “boutique” national electricity retailer, focussed on renewable energy initiatives that reduce energy consumption and expense. It says that having low overheads allows it to offer cheaper electricity solutions for customers. Urth Energy promises excellent electricity rates and offers a range of value add residential products, including:
- Urth Saver: Urth Energy will supply and install a solar system, which it owns, maintains and insures. It then sells the generated electricity to the household at “significantly cheaper rates”. The rate per kilowatt is guaranteed to be less than what the customer is currently purchasing from the grid, Urth Energy says.
- Urth FIT: Urth Energy says it offers solar customers “exceptional” feed in tariff rates. These are: 20 cents per kilowatt for customers who have their new solar installed by one of the company’s solar partners, or 10 cents per kilowatt for those with existing solar systems in place. The 10 cents is in addition to any current state feed in tariff payment.
“It’s Urth Energy’s mission to promote renewable energy savings, sharing the profits with customers, not sponsoring stadiums,” the company says. “As a boutique electricity retailer, Urth Energy takes pride in treating customers as an individual rather than a number. Urth wish to provide each customer with an electricity product that is best suited to their consumption patterns so that they receive the best value electricity for their home or business.
“Urth are also committed to providing customers with grid electricity at very competitive rates, providing excellent communication platforms so that customer expectations are exceeded.”
There’s no doubt that these three retailers provide some intriguing alternatives to the mainstream electricity plans offered by the big boys. There is a focus on simplicity, clarity, service, efficiency and value. Given they have only recently launched, their success can only be judged further down the track.
The Australian energy market is becoming increasingly competitive and it could be argued that this growing number of entrants may not be sustainable. But for now, consumers are being presented with some interesting propositions – whether or not they are convinced to switch or not remains to be seen.