Since Alinta’s decision to shut the Northern Power Station two years ago which doubled the wholesale price of electricity in South Australia — the South Australian Business Chamber has been constantly and consistently raising the concerns of our members to the various levels of Government.
In addition to our lobbying and advocacy efforts, we have hosted various forums providing opportunities for businesses to hear from experts on how to reduce their power bills. We have also been talking to retailers and project proponents about what can be done to help SMEs on a commercial basis. To date, the characteristics of the market have only enabled us to find a commercial solution for small market members via Lumo Energy. We are now looking to provide a solution for larger energy users through an aggregate or group buying collective, similar to that being pursued by the South Australian Chamber of Mines and Energy (SACOME).
Firstly, the South Australian Business Chamber is gauging whether there is sufficient interest from large market businesses, i.e. those consuming more than 160 MWh per annum per individual NMI* or approximately$50,000 per NMI, to be involved in an aggregated purchasing arrangement. (*The National MeteringIdentifier (NMI) identifies your network connection point and is listed on your electricity bill)
If there is sufficient interest from businesses, (with at least 200 GWh combined use) including a preparedness to contribute up-front to legal, tender and ACCC costs, the South Australian Business Chamber will facilitate the process.
Until now, competition law has legally restricted the South Australian Business Chamber from discussing potential terms and conditions with retailers, including price, therefore we can only advise that any tender we put out would likely be based on a three to five year term to attract new build generators.
Such an aggregated purchasing arrangement will only work on a ‘one in, all in’ basis, which is why it is important for the South Australian Business Chamber to ascertain whether businesses are genuinely interested or would prefer to negotiate their own electricity needs.
The South Australian Business Chamber Executive Director Industry & Government Engagement, Anthony Penney said “we recognise that businesses at all levels of consumption are hurting from skyrocketing electricity prices and need commercial solutions in the short to medium term”
“We’ve already launched a deal for small market customers with Lumo Energy and we’re now seeking expressions of interest from larger businesses willing to enter into a collective purchasing arrangement”
“Providing we get a material electricity load together, the South Australian Business Chamber will be making an application through the ACCC for authorisation to proceed with a tender to collectively purchase power”
“SME’s have to negotiate their contracts individually in any case, and the South Australian Business Chamber is offering an opportunity to join a buying group which would tender for the best available deal” “In a State with the world’s highest electricity prices, we need to look at every possible avenue to reduce the impact on the South Australia’s SME sector which we desperately need to grow”
