Far North Queensland’s electricity space may feel dominated by Ergon, which operates both the local grid as well as offers retail power plans, but it is not the only option, there are others available.
Most clients in the area are under the impression that they can only buy electricity from Ergon.
But in reality, there are other options available if your business uses more than 100,000-kilowatt hours per annum.
So why the confusion?
Ergon is the only electricity distribution network in Far North Queensland
The fact that Ergon has a monopoly over distribution in far North Queensland makes many people think that it is also the only retail electricity supplier.
Ergon owns the electricity distribution network stretching from The Sunshine Coast all the way up to the Northernmost point of Australia.
It is worth noting that network tariffs account for anywhere between 30 and 60 percent of an energy bill.
Australia has one of the longest and most expensive to maintain electricity grids in the world, which is why network tariffs are so expensive.
Network tariffs pay for the maintenance of the network, which is also known in the industry as ‘poles and wires’.
Ergon also offers retail electricity in the region under various rate tariffs. But there is another option.
Market Retail Contract vs Ergon Retail
Ergon buys electricity from generators around the country just as other retailers such as Origin, AGL, EnergyAustralia, and other
However, Ergon’s retail margins are far bigger than market retail offers from the above-mentioned companies, meaning that in most cases, businesses can secure cheaper electricity supply when they move away from Ergon.
If your business consumes more than 100,000 kWh per annum, it can access wholesale market offers on the National Energy Market
just like businesses in Greater Brisbane, New South Wales, South Australia, and Victoria.
A market contract involves going to tender to purchase electricity for a set period of time under futures prices.
The advantage of a market contract setup is that it can be substantially cheaper and is not susceptible to price movements, in that prices are fixed.
How much can I save if I switch to a market contract?
Leading Edge Energy has helped Australian businesses in North Queensland move to more advantageous market contracts. Here are the key results:
One such example was The Capricorn Hotel which saved $60,000 per annum when they switched to a market contract negotiated by Leading Edge Energy
The Thala beach reserve resort made a yearly saving of $22,000 by moving to a market contract.
Another example is a food distribution business that saved $9,000 per year moving to a market contract.
If I switch from Ergon to a market contract, will I still have support for faults and emergencies?
If you switch to a market contract, you will still pay network fees to Ergon. This means that they will still be obliged to offer support and repairs in the event of a fault or supply interruption incident.
That being said, at Leading Edge Energy, we often find that some businesses are placed in the incorrect network tariff bracket and we have often renegotiated contracts to more advantageous offers.
Is your business paying too much for electricity?
If you think your business may be paying too much for electricity in Far North Queensland, get in touch with us today for an obligation-free comparison.
We are here to help. We can quickly identify whether your business is eligible to go to tender for an advantageous electricity market contract.
If you want to learn more about the National Energy Market, you can also use our free suite of analysis tools.
Leading Edge Energy can review your current contract to identify ways to reduce your energy spend, even while under the operative period of your current contract.
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