LPE tells customers to go elsewhere amid rising Queensland energy prices

A Sunshine Coast energy provider has told its customers to go elsewhere in what it says is an ethical call amid rising power prices which could cost up to $30m in turnover.

A Sunshine Coast energy provider has taken the drastic step of telling its customers to go elsewhere in a $25m-$30m decision.

LPE chief executive and founder Damien Glanville confirmed his company had told its retail customers to switch providers immediately to avoid being stung by sizeable increases to their power bills.

Mr Glanville wrote to customers this week advising his company was “no longer in a position to provide competitive rates to our (on market) residential and business customers in the Queensland region”.

Mr Glanville cited what he said was an increase of 611 per cent in the rolling average cost of wholesale electricity for May, 2022, compared to the end of April, 2021.

“We strongly recommend that you seek an alternative supplier immediately to avoid extremely high electricity bills,” Mr Glanville wrote.

Mr Glanville told the Sunshine Coast Daily it was “prudent” from his company’s perspective to shift its focus to strata and solar.

LPE advised customers increases due on June 3 were set to shoot the cents per kWh usage rate up by more than 123 per cent.

“This part of the business (retail) was risking our stronger parts of the business,” Mr Glanville said.

“The only way you can support it is by putting up your rate. It’s the right thing to do.

“This is really squashing competition.”

He said it was only fair he told customers to go and seek out a better deal before they were affected.

LPE chief executive Damien Glanville. Picture: Cade Mooney

Mr Glanville said the decision was likely to reduce the company’s position from a turnover of about $75m to about $45m-$50m.

“It’s not an easy one but it’s ethically right,” he said.

“You’ve got to be able to walk down the street and look at people.”

Mr Glanville said current requirements for providers to effectively put up guarantees of about five times the average bill to guarantee supply of power were significant financial hurdles for smaller companies.

He said the state government owned the majority of Queensland’s generators as opposed to other states which had been privatised and said it was incumbent on the state government to protect consumers against significant price rises.

Mr Glanville said the situation was “manageable 12 months ago and also during the last summer - which is typically the worst time of the year – but when prices increase five-fold it means the amount of cash we have to have on hand to underpin this is simply not sustainable”.

“We can’t sell into this market,” he said.

Mr Glanville said his company – which was authorised in 2014 and ASX-listed in January, 2016 –remained a “viable business” which would not be going anywhere – it was simply exiting the retail segment to ensure its long-term viability.

The state government’s website states it owns more than $35bn worth of generator, network and distribution assets as part of the network of assets owned by both government and private sector companies.

Retail electricity prices in South East Queensland were deregulated in 2016 to increase competition and drive more retailers into the southeast market.

Price remain regulated in regional Queensland, the website states.

The Australian Energy Regulator’s State of the Energy Market 2021 report stated the national electricity market was undergoing a “profound transformation from a centralised system of large fossil fuel (coal and gas) generation towards an array of smaller-scale, widely dispersed wind and solar generators, grid scale batteries and demand response”.