Power provider tells customers to leave or watch bills double

The nation’s fastest-growing power provider has issued a stunning advisory to its 80,000 customers, urging them to leave before a huge bill hike.

A power retailer has taken the extraordinary step of urging its 80,000 customers to find another provider immediately as it prepares to double bills in response to soaring wholesale electricity costs.

ReAmped Energy CEO Luke Blincoe told The Daily Telegraph that the company’s move was a sign of the “dire situation” for competition in the market.

“It guts us to say to customers ‘the best thing for you to do is leave’, but they’ve got to shop around while there are still a few good deals around,” Mr Blincoe said.

“Switch out from ReAmped while you can.”

He said households that don’t leave are likely to be hit with a percentage bill increase in the “triple figures” — so at least a doubling in total charges.

Power company ReAmped has been asking customers to leave. Picture: Supplied

That’s on top of the 15 per cent hike the company imposed about three weeks ago.

“Our plan is to return to a price-leading position in future, but for now we want to be straight with people and say you should be looking to switch ASAP,” Mr Blincoe said.

“The truth is that the more customers we have, the higher our prices will need to go.”

Another provider, Sydney’s Discover Energy, has also been encouraging customers to leave.

Discover’s co-CEO Jeff Yu told The Telegraph: “We want to help customers avoid bill-shock, and are proactively notifying customers of upcoming changes to their energy rates and helping them to select the best alternative provider.”

Electricity pricing expert Joel Gibson of One Big Switch said a third provider, Queensland-focused LPE, had also told customers to leave.

Power prices: how to beat looming electricity bill increases

Another expert who has been monitoring the market since the 1990s, St Vincent de Paul’s Gavin Dufty, said “I have never seen this before.”

Mr Gibson described the situation as “the beginnings of a crisis.”

At least 18 retailers have withdrawn deals from the market, according to comparison service Canstar Blue, shrinking the range of offers by as much as 28 per cent.

ReAmped’s stunning actions are a response to the surging cost of wholesale power, which typically accounts for about one-third of a customer bill.

Power bills are set to soar. Picture: Andrew Henshaw

Until recently, ReAmped had been able to buy power at 5 cents a kilowatt hour.

However now, it is having to pay as much as 30c/kWh, Mr Blincoe said.

That is more than the current retail price on many plans.

Mr Blincoe said “competition is quickly leaving the market” and that the only providers who will be able to compete on price will be retailers who are also “making margins on the wholesale market as well”.

Retailers who both generate power and sell it to households include AGL, Origin and EnergyAustralia, which between them already control about 75 per cent of the retail market.

Mr Blincoe said “geopolitical events” — principally Russia’s invasion of Ukraine — were behind the surge in energy prices globally.

Gas-fired power generation was currently the “price setter” in wholesale energy markets, he added.

ReAmped CEO Luke Blincoe. Picture: Supplied

Gas prices are so out of control the Australian Energy Market Operator had to step in and put a cap in place in east-coast markets this week.

Mr Blincoe said Australia was suffering due to a “sustained reluctance” to invest in renewable energy on a scale that would have made the nation more self-reliant and not so exposed to global markets.

However, he also said there was “some merit in the argument” that Australia should have reserved some of its coal and gas output for domestic use as a shield against international price spikes.

Instead, the Australian gas price had been allowed to become “coupled with the global price and go on and exceed it.”

Residents have been warned to expect a price hike as the wholesale price of electricity jumps. Picture: Bev Lacey

ReAmped has about 80,000 customers; half of these are in Victoria and a third are in NSW. Most of the rest are in Queensland, though there are some in South Australia.

ReAmped broke the news to customers on Tuesday afternoon.

On its Facebook page, some customers said they were willing to pay more to keep competition alive. Others said they appreciated the honesty and transparency. And some were angry and annoyed.

Mr Blincoe said ReAmped wasn’t going out of business. Rather it was “hunkering down”. The company hoped that by being upfront with customers they might come back once energy markets normalise.

Mr Blincoe said ReAmped didn’t anticipate letting any staff go.