What hurts more – dealing with energy contracts.

Measures or impacts – what hurts you more when you are dealing with energy contracts as a small, but described as large in National Electricity law, business? What factors affect your decision to enter into the contract? How do you stand up for your rights?

The first rule is do not expect consumer legislation to protect you! You may be surprised that energy regulations even circumvent your rights. For instance: The deemed provisions, and price during the contract period. Then consider the extraordinary fact the Australian Energy Market Commission (AEMC) is on record as saying the equivalent of ‘caveat emptor’ – buyer beware is sufficient protection.

In the case of Energy Service Agreement, Retail Energy Agreement or simply Contract for Sale of Electricity (the description referred to by your retailer) you should realise you are without ‘warranty’. You see without a warranty the buyer takes the risk. The supplier or energy retailer takes no risk. In most cases this is true if you are a small (large business).

A series of recent brokering agreements by WIntelboff has highlighted to the client that this risk is critical. Even intervention strategies can be protracted and lack a feeling of satisfaction for the client. Most might even be frustrated because it is costly to fight, and if they qualified for the Ombudsman to investigate there is the risk they will be told ‘no, too difficult’, or the equivalent!

One client has penned her concerns in trying to get a fair contract, and we feel compelled to air them for her:

“On receipt of XXXXXX offer of renewal of electricity supply to the XXXXXXX XXX, the Manager, passed it on to me to “check out” as I had (and am still) involved with researching the power industry and finding ways and means of reducing our power bills.

The initial offer for three years from a numbers point of view looked like a vast improvement on what we are paying for Power from XXXXXX at present.

However on wading through the thirty odd pages of contractual agreement I realised that it was one of the most complex legal documents I had ever had to consider.

I recommended to XXXXX we ask the advice of the ‘crew’ who had been guiding us through installing Solar Power for the Business for two reasons….

They had a greater understanding of the Industry and what affected the retail electricity market…and I was concerned about the solar panel installation and other power reduction strategies affecting the tariff adversely with the 160Mwh factor

My concern that the fine print was mostly one way…to XXXXXX with no real guarantees built in to protect us from penalties..

Bottom line is…

In my personal opinion, XXXXXX’s business methods with this are appalling and amount to business bullying. Expecting a XXXXXXXX (requiring managerial and/or Board Approval) to make a decision with 2 weeks of receiving their renewal…AND…stating that the time could be extended…but didn’t when I requested it …. is tantamount to fraudulent behaviour.”

CO2Land org feels that a truly competitive industry would have adequate consumer protection, and you would expect where it was possible to lose customers you would be concerned about adverse behaviour. You would even expect a civil response to your queries – more than just the family phone message of ‘why we are great people’. Actually, when asking one retailer if it was possible to change a threshold provision – The actual response might surprise you – the 300 MWh pa + customer was told “you are too small a customer to influence us to adjust or amend our contract”!

It gets really scary at this point. They don’t care? Why you might ask. Some speculation could be: They might be selling short in the market. As such they can make more money from ‘double dipping’ than dealing with you. For the long sell retailer they might just offer fantastic prices to fill the books and just raise the prices later. The really scary thing is it is not just the raw energy prices at play here. It can also be environmental charges and some government fee liabilities.  

If you do not believe us – just read your contract very carefully. Some terms and conditions might be expressly stated, and some overtly say you are screwed.

CO2Land org is aware of only one retailer, at this time, that includes an undertaking to not rise prices for the contract with the exception of those mandated by government. Even then, you might be a little nervous when you realise the retailer is government owned! What if they mandate a change? What if they sell to a private company and the condition of sale says you can charge what you like – eh, you are deregulated? But better the bird in the hand as they say. At least if done wrong by Government you can vote them out eventually. Unfortunately, retailers in the mean time might just laugh and say how can you hurt me!

It is disappointing that tactics and marketing are used to make you believe they are doing it for you, when the deal is something else it is their insurance – not yours, and you are the one paying.

Stop Press – small *described as small, should ask for up to 17 % Discount on their bill. But what penalties take it all back again + more – that is for another post. In the mean time just remember to look at what you give up for the illusion of more!

 

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