Power prices Qld: Origin Energy enters regional market
In a move that could crack open the regional Queensland energy monopoly and drive down prices, a new player is set to enter the market.
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Origin Energy will move into regional Queensland for the first time, in a move that could crack open the electricity monopoly outside the state’s southeast and drive prices down.
The energy retailer claims it can entice regional Queenslanders with competitive prices, bundle deals and rewards programs as it expands into Toowoomba, Townsville, Cairns, Mackay, Rockhampton, and Bundaberg.
The move comes after former premier Steven Miles pledged to create a new publicly owned retailer to compete with state-owned Ergon Energy in the regions if re-elected.
But Origin retail consumer general manager Duncan Permezel said the company was confident it could match prices enforced by the Queensland Competition Authority and effectively compete with Ergon.
The state government’s uniform tariff policy stipulates remote Queenslanders should pay the same rate as their city counterparts – which Ergon was able to meet through government rebates to the tune of $537m each year.
The QCA concedes the rebate was the reason why regional customers did not have other suppliers to choose from.
But even without such rebates, Origin claims it can meet these prices through efficiencies within its online customer service platform Kraken.
“So we’ve now got a lower to cost to implement in that territory, which solves one problem, and then we’ll keep working with the Queensland government on the CSO (community service obligation) and the uniform tariff policy,” Mr Permezel said.
And it could also divert customers from Ergon through incentives such as Woolworths Everyday Rewards points, movie tickets and discounted fuel, and bundling power bills with internet services and LPG.
“Our electricity rates from day one will importantly be competitive with the incumbent retailer in regional Queensland,” Mr Permezel said.
“But we believe what makes us an attractive alternative is the value and benefits we can provide customers beyond their electricity.”
It is understood the National Electricity Market would not be impacted by the competition of two energy suppliers in regional Queensland, because the same number of customers would exist between them.
Energy Minister David Janetzki said he backed increased competition against the state entity, because it gave more choice to regional Queenslanders and could lead to reduced power bills.
“Origin Energy entering the regional energy market is a genuine private-sector-led initiative, demonstrating that Queensland is open for business and investment,” Mr Janetzki said.
Regional economist Colin Dwyer also welcomed the announcement, saying it could eventually bolster regional business confidence.
“Residential and business consumers north of Gladstone have been chasing better competition in the electricity market for some time,” Professor Dwyer said.
“This is a positive move.”
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