“This will wipe out so many businesses”: Company founder slams high energy bills despite cutting power use by one third

electricity, power, power prices

Melbourne business Fishprint has made a million-dollar investment aimed at halving its power usage, but founder Peter Booth says if his company’s most recent electricity bill is anything to go by, power prices are a “rort” that will be sending countless businesses broke in coming years.

We’ve cut our energy use by a third already, coming down from 3,000 to 2,000kwh [per month], and by my budgeting we’re paying $600 more than what we thought we should be,” Booth tells SmartCompany

The Melbourne printing business, which has been operating since 2002 and has eight full-time employees, has taken a sustainability focus for years. It recently invested in a new printing press worth $1.4 million, with a goal to cut its power usage in half over the coming months.

Booth says the full effects of the significant investment will take some time to be seen, but he was floored when he received his most recent monthly bill from Momentum Energy, which was more than $150 higher compared to the last billing period, despite the company using one-third less power.

When he queried the amount with his service provider, Booth was told summer demand charges were to blame. He hasn’t requested a payment plan as yet, but says the energy company didn’t give him a lot more detail on the charges.

They said, look we did send you a letter about this [these charges],” he says. 

“Well, you may well have, and if it was an increase of $60, we may very well be able to live with that. But I’ve got a bill here for $600 more than I’d expected.” 

Escalating power prices across Australia have made the headlines throughout this year, with Prime Minister Malcolm Turnbull sitting down with power companies to plead for better deals for businesses and households.

However, Booth says governments clearly aren’t doing enough, because even when a business like his makes a significant outlay with the intention of cutting energy use, it is still hit with confusing surcharges and rising prices.

“The federal government must act now — this will wipe out so many businesses, it will restrict the economy and could cause a recession just in itself,” he says. 

“They’re not even giving us any other renewable energy options. I’d would be happy to sign up [to them] already, but the incentives don’t seem to be there anymore and the payback is too long.”

Booth says he has contacted the Prime Minister’s office and the office of Energy Minister Josh Frydenberg pleading for a solution.

Small business ombudsman Kate Carnell told SmartCompany in October than one of the biggest concerns for small operators when negotiating energy bills is actually working out what you’re paying for.

“We’re seeing complaints about cases where businesses are signing up for something, but it wasn’t what they thought it was,” she said.

Booth echoes this sentiment, saying his business could not have predicted that by cutting its usage, the overall monthly bill would increase.

As a small business, hours in the day are precious, and it takes a lot of time to get a power bill and forensically dissect it. All these little extra service charges and summer penalty rates,” he says. 

The situation has led Booth to question whether the typical Australian SME can reasonably survive the summer months, given not all companies would have put the same focus on reducing energy prices as his business has.

How anyone can run a business when these things come in out of the blue? It’s impossible,” he says. 

It’s extremely difficult. We worked out a pretty tight budget to purchase the new press, this has thrown everything into jeopardy. I don’t know what we’re going to do, really.” 

SmartCompany has contacted Momentum Energy for details of its calculation of summer demand fees and payment plans for small businesses but did not receive a response prior to publication.

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3 years ago

Don’t worry about it. If you read Fairfax all business owners are nothing but employee rip off merchants, they are all living with significant investments in the Caymans, deserve to have the company tax rate lifted to 40% and so should be able to cope with some small increases in power prices that will go a long way towards saving the earth from annihilation.
Just suck it up, pay the price, smile and wave!
sarc off now!!!!!

Justin Tyme
Justin Tyme
3 years ago

There are many areas where there are cost escalations over and above what is or could be called reasonable. Indeed, those who can least afford those increases are those who are forcing them on our society. As bad as generalisation is, it is the push for socialist benefits which is incrementally increasing the overhead burden on employers. Where once the on cost of employment related to holiday and sick pay, along with workers compensation insurance, all up around 15%, that cost has ballooned.
Employers pay for compulsory union training schemes, redundancy contributions which go unclaimed, three or four different insurance categories, sick days, pre and post pregnancy days, and numerous levies, to many to list; all for the employee. Additionally there are an equal number of Government levies and charges which all up require a cash cost +110% to break even. And of course this compounds across society, so that effective take home pay is eroded and spending drops. Evermore marginal business will fail as rent increase, all utility costs accelerate and each level of Government scramble for even more income to dole out to the growing numbers of strugglers.
We have to break the cycle or it will be broken for us by our own collective greed

Jan Deane
Jan Deane
3 years ago
Reply to  Justin Tyme

And don’t forget domestic violence leave and in Victoria, a public holiday, instigated by the Andrews Labor government, for the day prior to the AFL grand final.

Colin Spencer
Colin Spencer
3 years ago

Same thing happened to me. Momentum Energy before we went solar were charging over $1,300 on each bill at our winery. After we installed a 10 kw/hr solar system, the bill stayed up, or increased. And this was three years ago, before the current energy crisis existed. This year I have put the matter of a better deal in the hands of experts at: [email protected] At no cost to me, they have negotiated a deal with AGL (surprised me), that is heaps better than the Momentum deal. Not only that, but they will check after 6 months to see if we are getting the best deal possible, and will change suppliers again, if we are not saving money.

3 years ago

The clowns in Canberra are laughing at us and are clueless. All parties lib, lab and greens etc don’t have any guts or sense. Not a clue how business can survive under all of the parties management.
I did not hear from the PM to drop off GST on any bills, god no need the money.
We have been told to expect power black outs as well this summer!
I am also very sorry for the older pensioners who may (WILL) die, for the real fear of cooling themselves BECAUSE they have a real fear of the bill in the letterbox.

What is the definition of an essential service and set price. How about ALL pollies get behind the rip off that they gave us in the beginning. Who allowed and signed agreements with the power companies. The government – is ripping us off as well with hundreds of millions being given to the Paris agreement that all major countries have pulled out of. It should burn in hell.

Rohan Baker
Rohan Baker
3 years ago

This is where government meddling in the energy market at state and federal level is killing our economy.

The prices started to rise when they started to roll out Ruinable Energy like windmills and solar. But dynamiting perfectly operating low emmission HELE coal fired power plants like Pelican Point, then closing Hazlewood and in 2022 closing Liddell is plain nuts.

But no, we instead favour crony capitalist tax hoovering schemes like the LRET and LREC and VEET subsidies is making millionaires out of green nut job CEO’s for forcing intermittent unreliable and non despatchable power onto the market.

The network engineers I deal with are tearing their hair out. Our energy market will completely collapse in the not to distant future.

1500 coal fired plants now under construction around the world. But we’re closing them all down to kill our economy. We are being led by traitorous muppets.

3 years ago
Reply to  Rohan Baker

We have all the coal we need for 1000 years. We should have the cheapest industrial power in the world.

This country sells 30% of the worlds bauxite, but only produces 1.5% of its refined aluminum. So thats a big difference and 10’s of billions in extra revenue lost.

If the qld government ran its own refinery with cheap power it made its-left, all profits could go to pay off their massive state debt.

This doable with will power.

But ti would have to be written into law the profits could not be used for anything else.

3 years ago

Good comments here !
I would add the following though; which also adds unnecessarily to the costs borne by the electricity consumer.
The necessary and actual generation, control and distribution to the door now only forms part of the bill to the consumer.
A significant reality these days is that a substantial proportion of the electricity bill goes on all the multitudes of CEOs, CExs, upper managements, boards of directors, call centres, marketing, sales, advertising, support administrations, I.T. depts, plush city offices, etc etc. This is multiplied many times by the 100 or so companies involved and especially in the retail part of the chain. So I dont know what can be done about that !!

3 years ago

My understanding is that the cost of generation is only a small part of the cost of energy. If the electricity was free the cost would only drop by about eight cents per kw-hr
The cost of distribution is high. There are two reasons for this. We are a big country and for political reasons the government has a promise to deliver electricity to every small country town. Hence we have thousands of kilometers of distribution which also causes large transmission losses. The second appears to be some “money for mates” arrangement where the distribution companies are (were?) allowed to design whatever improvements they wanted to the distribution system on some sort of “cost+” scheme. A cost plus scheme is OK for wartime production but we created a monopoly and then negotiated a cost+ scheme with it. This is obviously not going to create competition to keep prices down.
For some reason we are in an environment where there is really only one source of power and one set of distribution cables but we invented the need to have hundreds of companies wasting our time by selling discounts to the electricity prices. Why did we need lots of retailers and lots of overhead and lots and lots of profit to send out our bills.

One thing going for renewable energy is that its a distributed system so no need for high power distribution. Most of the expensive country towns can be served by a local PV farm and a windmill. How many people are following prices for PV power overseas. The current world record price for power is about USD0.017 cents per kw-hr and several auctions are delivering less than USD0.02. The electricity is almost free now.
Surely the problem is that we haven’t had a decent government for 50 years. They are all old men thinking yesterdays thoughts. Our overseas rivals somehow find old men who seem to be wise and think of the future of their countries and of the future generations.
Everything our Pollies do seems to be tainted with a smell of corruption or just creating a situation that some of their mates can profit from..

Fred Bear
Fred Bear
3 years ago

It’s been proven in my past, that Electricity Company employees are lazy to the point of not actually inspecting electricity devices for power usage.
They use any excuse to avoid taking a reading of them.
I got caught in a real bad winter, paying high usage bills when in fact I only used a TV, 1 light and a electric blanket all winter.
When I vacated the unit, receiving my final bill, found that the electricity company was quoting estimates. They owed me almost a years worth of overpayments so when I got my own house, I made sure they never ever estimated my power usage again. I could have died during that winter so will never ever trust any electrical company or services again who use estimates in billings.