Small business power deal has strings

By Richard Braddell

WELLINGTON - Smaller firms north of Taupo could save between 5 and 15 per cent on their electricity bills under a deal by the Employers and Manufacturers Association (Northern) with a new energy retailer.

But although a business using $1400 of power a month could expect a $2000 annual saving, the savings are not entirely risk-free since the power supply deals with recently formed Energy Options require two-year commitments.

However, the chief executive of Energy Options, Donald Cheesman, said the contracts contained an exit clause that could be activated within three months if customers found they were not getting a better deal than before.

Mr Cheesman said the commitment thereafter was essential because Energy Options was itself entering into long-term contracts to take power as well.

Energy Options is owned by Mr Cheesman and Steve Eskrigge, both of whom have backgrounds in electricity and gas, and Judy Maguire whose experience lies in financial control.

The EMA's chief executive, Alasdair Thompson, said the arrangement with Energy Options would enable its 5000 members to take advantage of their group buying power.

"The amount firms can expect to save is typically about 20 per cent of their present power costs, though when network and transmission costs are included, the saving is about 10 per cent," he said.

While smaller firms on the North Shore, West Auckland, Coromandel/Thames, Rotorua, Taupo and Waipa could expect to save around 10 per cent, businesses in central and south Auckland could trim electricity costs by 12 per cent.

However, Mr Cheesman said the savings were dependent on wholesale power prices remaining at present levels.

According to the wholesale electricity market manager, M-co, electricity prices last week were near the mid-point of their 6c high and 2c low per kWh in the last three months.

Mr Thompson said the agreement was pitched mainly at small to medium-sized businesses, but separate arrangements for larger ones using more than $25,000 of electricity annually were likely.

Meanwhile, another electricity retailer, Empower, has cut a deal with American Express in which the latter's cards can be used for payment of its household and business power bills.