Simply Energy rebuffs would-be new customers as wholesale electricity prices soar

For the first time, an electricity retailer with its own power generation assets has started turning away new customers as the wholesale energy crisis worsens.

One of the larger electricity retailers has begun turning away potential new customers amid growing fears that chaos in wholesale energy markets will make it uneconomic to provide power at affordable prices.

Simply Energy, which has 730,000 customers, has joined at least 18 smaller providers in removing offers for new customers.

A Simply Energy spokesman told The Daily Telegraph: “Our current focus is on helping our existing customers understand their energy costs and manage short-term rate rises, while taking steps to keep our business strong in a changing energy market.”

Simply is the first retailer with its own power generation assets to decide to turn away potential new business.

Its parent, French company Engie, operates gas-fired generators and wind farms in South Australia.

Willogoleche wind farm is owned by Engie. Picture: Supplied

In a further worry for households trying to lock in an affordable deal, “cheap fixed-rate plans (are) disappearing by the day,” power price expert Joel Gibson of One Big Switch said. The charges in most electricity deals can be changed at any time, provided customers are given notice.

Research by One Big Switch has found some retailers — typically those that had the cheapest rates set when wholesale prices were low — have hiked usage charges by as much as 285 per cent in recent weeks.

One Big Switch’s Joel Gibson. Picture: Tim Hunter

From July, more than 500,000 households that have never shopped around and are therefore on federal government-regulated “default market offers” will be hit with a price increase of as much as 14 per cent.

The DMO is a relatively high rate to begin with, but comparison site wattever.com.au’s founder David Hiley said “at current pricing for 2022-23 wholesale future energy contracts, retailers would lose money selling electricity at the DMO (price) … if they are buying all of their electricity at those high wholesale rates”.

A spokesman for the Australian Energy Council, which represents power retailers, said “if a retailer were to acquire customers without (pricing) hedge cover today, it is unlikely that the DMO price would enable them to recover their costs”.

The DMO for next financial year was only announced last week, underscoring the speed and severity of the power price explosion.