Benefits of Choosing a Locally-Owned Electricity Provider for Perth & WA Business Owners

Friday, January 5th, 2024

All business electricity providers and retail power companies in WA are very much the same, right?

Yes and no! ‘Yes’ because they are bound by the rules and regulations set out in the Wholesale Energy Market (WEM). This is governed by the ERA (1) and ‘Yes’ because they retail electricity to consumers using the same power lines transmitted by Western Power, but the answer is predominantly ‘No’. In this overview of business electricity providers operating in the South West Interconnected System (SWIS), we take a look at which companies are locally-owned electricity providers and how Western Australian business owners can benefit from choosing locally-owned suppliers.

Western Australians are fiercely loyal; even the State Government introduced a policy in 2022 to support local suppliers (2). However, compared to other states, few locally-owned electricity providers in Western Australia supply local businesses. A major reason is because the SWIS grid is one of the most geographically and electrically isolated grids in the world (3). Other reasons include the financial and regulatory barriers that large national and international companies can overcome more easily than smaller locals due to their available resources. Even though WA businesses are buying locally generated electricity transmitted via the same wires, they may not choose a locally-owned Western Australian electricity company. Generally, what constitutes a locally owned company varies by the type of industry and their location. In this overview of local electricity providers in WA, the following criteria have been employed to define local ownership;

At least 51% owned by local residents
The business operates locally and pays taxes in the local State/ Country
The business is autonomous (i.e. not a franchise)
The business contributes to the local community

In WA, there are two major electricity grids servicing the entire state. Horizon Power is owned by the State Government and is the sole electricity retailer to most of regional Western Australia (4). The SWIS grid services Perth and the majority of the South West (5) and has less than ten active electricity providers supplying retail services to businesses in the SWIS grid.

Who are Locally-Owned Electricity Providers in the SWIS?

Since the electricity deregulation in 2006, new electricity retailers emerged, supplying electricity to eligible or ‘contestable’ WA businesses consuming over 50,000 kWh per annum in the SWIS grid. These contestable businesses, looking to reduce electricity bills, were now able to get quotes from other licensed electricity retailers and no longer needed to accept the State Government’s regulated Synergy tariffs. Although there are over 30 licence holders for retail electricity in the SWIS grid (6), only a handful of active retailers supply WA businesses in the SWIS grid. In the table below, electricity retailers are ranked in size according to the number of accounts per the Energy Report published by the ERA (7). As shown, only one of the top four electricity companies are locally owned independent providers.

The Four Largest Electricity Companies Servicing the SWIS Grid in Western Australia

Electricity Companies Perth	Ownership	State/ Country	Ranking (# of accounts)	Google reviews rating out of 5)
Synergy	WA State Government	Perth, WA	1	1.5
Alinta	Chow Tai Fook Enterprises (CTFE)	Hong Kong	2	2.1
AGL (Perth Energy)	Publicly listed company Australian and international major shareholders	Mixed	3	1.7
Amanda Energy	Independent WA owned and operated	Perth, WA	4	4.9

Energy Reports – Economic Regulation Authority Western Australia (erawa.com.au)

Most consumers are not aware that independent energy retailers in WA actually underwrite Western Power for transmission and the AEMO for generation via security deposits that are paid to cover the fixed costs of supply for contestable business electricity accounts. This is a security measure designed to cover the fixed costs of supply if a business defaults on its account, typically paid in advance by the energy retailer. Although this provides a reliable electricity supply, it also inhibits the entry of many locally owned independent suppliers who need to fork out millions of dollars to pay for the security deposit of their accounts. Synergy are backed by the State Government and have the most business electricity accounts in WA. This means they can afford to absorb a higher degree of loss should some of their accounts default. Conversely, despite being the fourth largest energy retailer in WA, Amanda Energy is a small local independent provider without Government backing or deep foreign pockets. This means we exclusively rely on their expertise, service, and ability to deliver positive outcomes to acquire new customers.

Advantages of Choosing a Local WA-Owned Electricity Provider

Local Industry knowledge and experience

Possibly the biggest benefit in dealing with local electricity providers is that they have a better understanding of various industries and businesses. Usually, independent local electricity suppliers have fewer staff who are more experienced, and they can provide quick turnaround solutions that help reduce overall expenditure. This provides a much better result for businesses who experience real issues with energy supply. For example, power outages are a real problem in Agriculture and for Agribusiness. Solving this type of issue often requires local tacit knowledge and innovative solutions being implemented in a timely manner. Explore a real example of how we helped Center West Exports & Sun City Farms – Amanda Energy.

Personalised Customer Service

Smaller local energy companies can often provide a higher level of customer service and meet the unique requirements of local businesses. Consider how difficult it is to contact your electricity supplier when you have a problem or need advice. Dedicated customer support saves a business owner and manager a lot of time and frustration. By choosing a local independent electricity company, a business owner can talk to local experts who can actually answer questions quickly and provide meaningful solutions to reduce energy costs. Customised solutions can deliver better results than low contract rates, and in a volatile market, contracted rates can increase due to material adverse events leading to higher rates. Therefore, local independent energy providers who offer specific strategies with their energy plans usually deliver better results. They can also be more flexible and understanding when accounts are overdue or scheduled to be disconnected.

Supporting the Local Economy and Sustainability

Many electricity and power companies in Perth advertise that they employ locals or operate locally, but where does the money go when you pay an energy bill? Is the tax payable in Australia or abroad if the company is foreign-owned? Where do the profits actually go? With an independent local provider, taxes are paid locally, and the profits remain in WA.

Many energy retailers connect with their local community by sponsoring groups and events, delivering awards and helping fund particular causes. This shows local support, but not all companies are integrated into their local community. Donations and sponsorships are certainly helpful, but it is worth seeing what activities and case studies your energy provider has been involved in before choosing a supplier.

How to Choose the Right Local Electricity Provider

If you are a small business, ask for a phone call or email explaining how electricity pricing works and what they can do to help minimise electricity expenditure for your business.
If your business consumes large amounts of electricity (over 160,000 kWh per year), ask to meet with an energy consultant to discuss the best options to suit your business.
Ask your energy retailer if you have a dedicated account manager to call directly if you have questions or experience problems.
Choose a business electricity provider that responds quickly and easily. Consider another provider if you have to wait on hold for more than 30 minutes or 3 -5 days to get an email reply.
Google reviews – take a few minutes to read an electricity company’s reviews and learn what previous customers experienced. It could save you more than money!

Secure the Best Business Electricity Provider

As a business owner, cutting electricity costs requires a holistic approach that reduces overall electricity expenditure and delivers a reliable electricity supply. Choose a provider with localised knowledge and experience who can provide effective solutions unique to your business. Demand personalised and prompt customer service so you don’t waste valuable time and energy that could be spent on your business. Finally, support companies that support the local economy and read about other people’s experiences with electricity companies before making a decision.

Contact Perth’s largest local independent energy provider today and see how much you can save on electricity and gas.

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