Energy should be simple enough to understand, right? Electricity is generated, and a business pays for what it uses.
But WHO that money goes to leaves a lot of business owners in the dark. The average Australian Business owner is unaware that much of their electricity expenditure ends up overseas.
A typical commercial electricity account is broken down as follows:
- Retail charges (including supply charges) – 30%
- Network charges – 60%
- Environmental charges – 10%
Why do network costs make up the lion’s share of the account?
Electricity Retailers (Origin, AGL, Lumo etc.) don’t always create electricity, they tend buy it wholesale and sell it to consumers at a higher rate. More often than not, the power created is 100’s of kilometres away from our CBDs and manufacturing hubs. The network infrastructure (wires and poles) cost billions of dollars to maintain each year.
Who owns and controls these networks?
This depends on which state you’re in, for example, in Victoria, the grid network was sold to overseas corporations. Network charges typically increase every January or July, putting more and more cost pressure on businesses.
Where is all this money actually going?
- Powercor – China (Hong Kong)
- Jemena – China/Singapore
- CitiPower – China (Hong Kong)
- Ausnet – China/Singapore
- United Energy – Singapore
With every power bill paid, money not only leaves your business, but distributors’ profits can be sent overseas.
With this month’s proposed sale of NSW Ausgrid assets to China, this worrying trend seems to be continuing and it appears that very few in the business community are talking about it. The initial sale was blocked due to “terms of the agreement”, but many are becoming more and more worried about the economic implications for large energy users.
Unknowingly, the hard-earned revenue being generated by Australian businesses is being used to fund overseas profits – so how can businesses take back some control over not just how much they pay but WHO they pay?
The reality is, due to supply shortages, and legislated changes to network costs, power prices are going to increase significantly in the next six months.
Speak to us about some key strategies to take back control on what you pay and who you pay for power.