Government drops $11 million on energy bill advice for small business

energy bills

Minister for Energy and Emissions Reduction Angus Taylor. Source: AAP Image/Dan Himbrechts.

The federal government is spending $11.37 million on several third-party services designed to deliver power bill relief to small businesses.

Under the package announced Monday, one-on-one energy consultations and a new online tool aimed at allowing businesses to compare their bills with similar firms will be rolled out.

Minister for Energy and Emissions Reduction Angus Taylor has brought advisory business AlphaBeta and digital accounting firm Xero into the fold to oversee the comparison tool.

Meanwhile, the NSW Business Chamber will be responsible for the national rollout of one-on-one energy consultations for firms with between six and 20 workers.

The program — dubbed the business energy advice program — has been designed to work alongside the recently implemented Default Market Offer (DMO) scheme, hoping to encourage business owners to renegotiate their electricity deals.

The DMO was unveiled by the Coalition ahead of the federal election earlier this year, as a pitch to address skyrocketing business power prices by scrapping widely criticised standing offers in states where they existed, replacing them with prices set by the energy regulator.

Figures floated by the Australian Energy Regulator in April outline savings of between $457 and $896 for small businesses consuming 20,000kWh of electricity per year.

The ACCC-recommended reforms apply to firms in network distribution zones not already covered by retail price regulation, including New South Wales, South Australia and South East Queensland.

But, amid concern many business owners are missing out on cheaper deals by not renegotiating their plans in the wake of the change, the government hopes to raise awareness and encourage proactive efforts with its latest announcement.

Figures put together by comparison site MakeitCheaper found 77% of businesses weren’t on standing offers, and so haven’t been switched over in the wake of the DMO implementation.

“We know that people who shop around get a better deal. This program will help Australian businesses get a fairer deal on energy,” Taylor said in a statement circulated Monday.

The announcement is timed ahead of Taylor’s appearance at the Council of Small Businesses Australia (COSBOA) national summit later this week, where he will face industry questions over how successful the DMO program has been.

“The Business Energy Advice Program is an important tool for small businesses to access resources and tailored expert advice to help them navigate the energy market with confidence and lower their energy costs,” Taylor said.

The energy comparison tool is free and was designed by AlphaBeta and Xero.

The exact details of the partnership between the government and each company were not disclosed on Monday morning.

AlphaBeta was contracted by the Department of Environment and Energy in April under a $1.37 million deal for the provision of a “business energy advice program”, which runs until April 2021.

The tender was granted under limited conditions due to “an absence of competition for technical reasons”, which were not disclosed.

The NSW Business Chamber will also run one-on-one energy consultations under a $10 million contract with the Department of Environment and Energy which runs through to June 30, 2022.

AlphaBeta director Andrew Charlton said his company carried out “extensive analysis” in its development of the tool.

“Having a solution that is funded by the Government and independent of any energy retailers was viewed favourably with the businesses that were involved with our research,” he said in a statement circulated Monday.

Xero said on Monday its own data indicates 48% of small businesses don’t monitor their energy spend, while one-in-two are on extended contracts.

The ACCC found in its wide-ranging review of energy prices last year that extended contracts delivered worse outcomes for consumers and businesses.

Australian small business ombudsman Kate Carnell welcomed the initiative on Monday.

“Small businesses pay higher rates than households and use more energy, particularly manufacturers and the hospitality industry.

“They are less confident in finding the right information because what is out there is so complex, and they really don’t have the time and resources to investigate all alternatives,” she said in a statement circulated Monday.

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