Competition from Alinta Energy is cutting the price of power bills

THE promise of deregulation bringing prices down in Queensland’s electricity market has finally been realised with the arrival of one particular player.

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GREATER competition among electricity retailers has saved Queenslanders up to $100 million on their power billsover the past year.

New analysis shows that big discounting by Alinta Energy since it entered the southeast Queensland market last August has cut the average household cost by $159 to $365 a year.

That equates to a combined total of between $20 million and $40 million across the company’s 125,000 local customers.

But a report by independent consultants Deloitte Financial Advisory concludes that Alinta’s arrival – in partnership with the government-owned generator CS Energy – has also forced competitors to slash prices.

“I would be surprised if that benefit has not been doubled. There could be anything up to $100 million extra in the pockets of Queenslanders,” Alinta Energy managing director and chief executive Jeff Dimery said.

“Queenslanders have more money to spend on the things they want to spend it on.”

The Deloitte analysis says the average discounts offered by other retailers has almost doubled from 8 per cent to 15 per cent since Perth-based Alinta’s push into the Sunshine State.

And the rate of householders switching power companies to get a better deal has doubled from 10 to 20 per cent.

Power bills have fallen due to competition from one power retailer.

“The entry of new retailers into the retail market can change the dynamics of the market,’’ the report says.

“These retailers can, and do, challenge the market share of existing retailers.”

Mr Dimery said: “Rather than ripped off, I would say its evidence there was room for improvement. That’s what competitive markets do.

“We’ve known for some time that we are having quite an impact since our market entry to Queensland.

“The Deloitte report gives us hard evidence that that is occurring.

“I spend a lot of time talking to customers directly and the message I get loud and clear is that prices are the main point of concern for them.”

Alinta launched with a Home SaverPlus 25 product which offered a 25 per cent discount for customers who pay their bills on time.

That was increased to 28 per cent in February.

The firm will continue its aggressive strategy today, announcing a further 1.6 per cent reduction on its weighted average tariffs from August 2, saving the average family an extra $28 per year.

Mr Dimery says it will be the cheapest advertised deal on the market.

Consumer groups and national watchdog, the Australian Competition and Consumer Commission, have criticised the plethora of discount deals, saying they confuse customers, especially those where householders lose the savings – and may face penalties – for paying bills late.

“We are listening and working on that,” Mr Dimery said.

“We will create new products designed to reward customers irrespective of whether they pay by the due date and what a reasonable penalty is.

“To be a day or two late and lose all your benefits does seem harsh.”

Alinta is ahead of schedule in its goal of securing 250,000 SEQ customers.

And Mr Dimery is keen to see deregulation of the electricity retail market in the rest of the state, where government-owned Ergon Energy holds a monopoly.

“We understand that issues around cross-subsidisation between the metropolitan and regional customer bases need to be addressed.

“We are keen to be involved … why would you not want other Queenslanders to benefit?”