Energy Management Services

The latest level of deregulation of WA electricity markets came into effect in 2005. Early in that year, EMS became the first business that guided WA businesses through the process of getting substantial savings by taking advantage of competition. Brokers entered the market about seven years later.

Each electricity meter that consumes at least 50,000 kWh p.a. (~$14,000 p.a.), is deemed to be “contestable”. Most businesses that meet that criteria can now buy electricity from around 10 retailers, however businesses that consume between 50,000 kW p.a. and 160,000 Kw p.a., are deemed to be “small use” customers. A few retailers don’t have a small user license.

SAVINGS – The 100’s of EMS clients that have taken advantage of our services, save on average, around 30% compared to the standard Synergy tariff that they have migrated from.

GETTING THE BEST VALUE – It is important to note that, cheapest doesn’t necessarily represent best value.

Determining best price is the easy part. In comparison, other variables can make price differences of little consequence. Without the right advice, massive avoidable penalties are possible. Signing up for the wrong conditions has resulted in avoidable penalties of 100% or more.

In the early days of deregulation, price was the only significant variable. Soon conditions became important points of comparison. Now there are many other variables.

In a market that can change quickly, detailed analysis is most important. EMS have dealt with every retailer that has participated in the deregulated market. Our analysis includes dozens of points of assessment that come under the broad headings of:

1. Price
2. Conditions
3. Service and flexibility
4. General support and advice
5. Disclosure and ethics
6. Errors and omissions

Because we assess all factors, our clients don’t make price only decisions. They often don’t choose the cheapest.

Contract and Service Support – Our job isn’t finished when you implement new arrangements. Our post implementation supports services include contract and service support, to help resolve any difficult issues that may occur.

OUTSOURCING ELECTRICITY CONTRACT NEGOTIATIONS

Many years of accumulated Intellectual property is needed to determine best value. EMS is the only party that has been advising WA electricity users about the merits of offers from ALL electricity retailers, since the current level of deregulation came into effect in 2005.

We have always put a strong emphasis on ensuring we understand and report on all the important elements of an electricity supply arrangement, including downsides and risk management options. To do that, we tap into the knowledge of all electricity retailers, as well as a range of other energy experts.

Getting the best value from a choice of around 10 retailers, requires an understanding of retailer behaviour as well as 100’s of pages of contracts electricity customers must sign. These can range from a handful of pages, to around 50 pages, much of it written in difficult to understand that isn’t designed to protect the client. There are risks and rights to be understood and managed. That’s not possible without years of continuing studying and questioning all the options.

Our unique tender Key Facts Statement is designed eliminate the ambiguity created by complex legal documents ensuring that the retailer and client understand their key rights and obligations.

• Engaging a consultant or broker

Consultants earn their income in a transparent way as a result of a direct arrangement with their clients.

Brokers earn their income from (a usually unknown brokerage margin), that is added by the retailer, to the price their client would otherwise pay. Regardless of the result achieved, the client pays brokerage based on the units of electricity consumed over the life of the contract. That brokerage is redistributed by the electricity retailer, from the client to the broker.

How much are you paying? – It is important that the letter of authority the third party must obtain, discloses if your service provider is a consultant that is remunerated separately by the client, or if a broker, how much brokerage you will be paying.

Because consultants don’t need to sign an agreement with the retailer, they can recommend the services of any of around 10 retailers. Brokers can only make recommendations on behalf of the limited number of retailers they have signed brokerage agreements with deal. You won’t know if the recommendations are influenced by the amount of brokerage that can vary massively by broker, retailer and individual deal.  

Small electricity retailer margins in respect of a virtually identical product that can be purchased from around 10 retailers, mean that retailers can’t absorb brokerage. Indeed, around two thirds of the cost of electricity relates to fixed costs that the retailer must pass on and has no control over. Those costs include statutory and network costs. The level of brokerage you pay can actually be much higher than the retailer’s margin.

As a consultant that doesn’t receive any remuneration from retailers, we appreciate the cooperation and advice we receive from electricity retailers, but allegiance is to our clients only.

Are you Dealing with a Consultant or Broker? – Although their roles are quite different, the terms are sometimes used interchangeably. If you are dealing with a party that:

• Can’t deal with each of around 10 electricity retailers,
• doesn’t charge you a direct fee,
• or direct charges you a low fee of around $1,000,

you are dealing with a broker and will have brokerage added to the electricity tariff you would otherwise pay.

For more information, please call (08) 9277 5950 or email: electricity@emswa.net.au