“This will wipe out so many businesses”: Company founder slams high energy bills despite cutting power use by one third
Wednesday, December 13, 2017/
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.
Be honest about your situation: How vulnerability helps businesses thrive Sue Parker DARE Group founder
Own it: The 10 things you need to do to manage your personal brand Lisa Stephenson Who Am I Projects founder
Six invaluable lessons: What 20 years in aged care taught me about being an entrepreneur Natasha Chadwick NewDirection Care founder
An entrepreneurial superpower: Eight tips to help develop resilience Adala Bolto ZADI Training co-founder
Going through a lull? Five areas you should invest in when sales drop Tamara Alaveras and Sonia Majkic 3 Phase Marketing co-founders
Stop telling us how busy you are, it's boring and charmless Ian Whitworth Scene Change co-founder
Blandification™ and the state of modern branding Jeffrey Oley The Offices co-founder
Why you should find the right role for the right person — not the other way around Bruce Stronge Outfit founder