Published On: Sat, Feb 28th, 2015

Utility Flexibility: Are You a Contestable Customer?

Are you free to choose your business electricity provider? Most Australians don’t realize that yes, they are. Here’s how to get the provider you want, thanks to the contestable customer regulation in the ERAR.

If You’re A Gas Customer…

Ever gas customer is free to choose whatever provider they want. However, there are some restrictions based on volume. For example, Synergy isn’t allowed to supply you if you use less than 0.18TJ of gas in a year. This amounts to about $6,200 worth of gas. That might sound like a lot (it isn’t if you’re a business, but it might be if you’re drawing for residential use). Not everyone will use this amount, however.

Businesses that switch can realise substantial savings thanks to competition driving down prices. It works just like anything else in a freer marketplace. Businesses compete with other businesses to offer you a lower price per unit of gas.

photo Stefan Krause, Germany

photo Stefan Krause, Germany

If You’re An Electricity Customer…

Your electric company might be forced to allow you to choose if you use more than 50MWh per year, or if your distributor isn’t Western power. You must also be a contestable customer. A contestable customer is one that uses more than about $14,000 per year of electricity. That’s more than 50MWhs in a year.

Mostly, this applies to businesses with somewhat large scale operations, but it might apply to some large residential areas as well. Infinite Energy is an Australian business electricity supplier, for example, that offers an alternative to some of the more common energy suppliers that businesses use.

How To Find Retailers

All retail operations that service small use customers must have a standard form contract which is approved by the Economic Regulation Authority (ERA). The ERA website also shows you a list of retailers in your area that you can choose from. You can call these retailers for pricing and see what they have to offer in terms of supply.

You may not always save money on the cost of your utilities, but sometimes you will, and because it’s so easy to locate alternatives, there’s little reason not to at least check it out. In some areas, you may only have one alternative. But, if you can shop three or more suppliers, you’ll find the greatest savings from increased competition.

How To Make The Transfer

When you’re a contestable customer, and you’re transferring from your existing provider to a new one, just contact the new retailer and request a transfer. The new retailer is going to put in the transfer order and make the transfer happen for you. Most of the time, the transfer can be done in a few weeks.

Every gas contract will tell you that the contract ends if you sign up and transfer to a new retailer.  Some electric contracts will also have this stipulation in writing, but always check before you transfer. Your previous retailer is not allowed to bill you for any energy that’s used after you switch providers.

Guest Author :

Robert Mitchell is an economics instructor and business finance consultant. Always on the lookout for ways to save businesses money nowadays, he posts what he finds online. His articles can be found on many business, finance and economics blogs.

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