The long-term survival of a thriving small business in Pambula is under threat due to sky-rocketing electricity costs.
Wild Rye’s Baking Company owner, Todd Weibe was shocked to receive his latest electricity bill which almost doubled from the previous month, even though his consumption for the period had dropped considerably.
“It seems to be totally unjust that our business will be forced to cease operation if these charges continue,” Mr Weibe said.
He said that after Essential Energy lowered the consumption threshold for businesses from 160 megawatt hours/year to 100 megawatt hours/year, his bill went from just over $2500 in October, 2013 to more than $4600 in the following month, in spite of his average consumption falling from 13742 kilowatt hours/month to 13137 kilowatt hours/month.
“To put that in terms domestic users might better relate to, that equates to an increase from an average 18 cents per KWh to 35 cents per KWh,” he said.
Mr Weibe explained to the News Weekly that in 2013 he invested heavily in his premises to improve health and safety conditions and to make the business more energy efficient, but the sudden and huge increase in electricity tariff means he will have to find another $25,000 a year, something he says is unsustainable.
The solution is not to pass on the cost to his customers. “We are happy with our margin structure,” he said, acknowledging that the added cost would make that an option for many businesses.
Mr Weibe said that with the region not having access to the natural gas network, he has no other means to significantly reduce his electricity consumption, and therefore no way of getting under the new threshold for the higher tariff.
The tariff changes came like a bolt from the blue without any warning and Mr Weibe wonders if it relates to new ‘smart meter’, which was installed immediately prior to the increase.
His Essential Energy statement also now includes other charges that did not appear on previous bills.
“It looks like profiteering on Essential Energy’s part,” he said, adding that it represents a disincentive to commercial investment and makes a mockery of political rhetoric about support for small business.
Wild Rye has been part of Quondola Street, Pambula’s streetscape for eight years. “In this time our business has grown from a bakery hiring two fulltime staff and two casuals servicing one retail outlet to one employing seven fulltime staff and eight casuals,” Mr Weibe said.
He has complained to the NSW Ombudsman and it has been investigated with Origin Energy, Mr Weibe said.
Mr Weibe has sought the help of Member for Bega, Andrew Constance. In a letter to him, Mr Weibe says: “What I am having trouble accepting, and this is why I am asking for your assistance in this matter, is why a successful small business that has grown from four employees to a business that employs currently fifteen staff is about to be put out of business by the greed of the network owner which in our area is Essential Energy. I fully expect that for the past eight years they were making a profit from us, but to suddenly almost double our charges seems totally unreasonable.”
News Weekly spoke to Mr Constance who said he was very keen to meet with Mr Weibe to discuss the situation. He said that he had taken the matter up with the office of the Minster for Resources and Energy. Mr Constance said that the NSW government has been making inroads into lowering costs to consumers citing recent IPART rulings on electricity pricing.
The News Weekly asked Essential Energy for comment.
It said that it is unable to discuss individual circumstances.
“However in regard to network prices, these use-of-system charges are applied for accessing our electricity distribution network and also include a charge for the use of the transmission system and a contribution to the Climate Change Fund,“ Cathy Weekes manager Community Relations, South Eastern region said.
Network prices were subject to annual review in accordance with pricing determinations by the Australian Energy Regulator (AER), Ms Weekes said.
“Essential Energy’s network is built to manage peak load, not units, and its pricing reflects the costs of supplying electricity at various times.
“Electricity distribution services are provided to a range of tariff or customer classes that are identified by their relative impact on network costs,“ Ms Weekes said.
“The demand imposed by larger customers has a more direct and significant impact on network costs than smaller customers. It is therefore appropriate that larger customers pay for the additional demands and pressures they place on the energy network during peak periods.
“Once a customer’s electricity consumption exceeds 100 MWh (megawatt hours) per year they are required to be on an interval meter. In addition, we regularly check if customers are consuming more than 160MWh per year in electricity as this means they are required to be supplied under a Negotiated Retail Electricity Supply Agreement with a retailer of their choice.
“A Negotiated Retail Electricity Supply Agreement of this type incorporates both retail energy prices and a demand-based network tariff that reflects the higher cost to the distribution network associated with the additional demands and pressures that large customers can place on infrastructure when they are operating at peak demand,“ Ms Weekes said.