ActewAGL, a premier sponsor of Canberra's centenary celebrations, has lost a major contract to supply the government electricity.
In an embarrassing blow for the power retailer, the ACT government has sidelined the organisation it part-owns and has awarded a significant contract to Queensland company ERM Power Retail.
The decision, taken largely by the Territory and Municipal Services Directorate, has caused ActewAGL to begin reassessing its community sponsorship.
The Canberra Times understands that Treasurer Andrew Barr was ''more than surprised'' by the outcome of the tender process. ActewAGL is a million-dollar sponsor of Canberra Centenary and is its ''principal partner''.
But in this 100th birthday year for the nation's capital, the local company has seen more than half of the retail business it provides the government go interstate.
The tender was awarded to ERM on December 21 and a two-year contract to provide energy to the government's major outlets began on January 1.
The Queensland company now provides power to the ACT government's larger offices and establishments, including its hospitals, jails and schools.
The contract is worth $16 million over the two years.
ActewAGL was successful in securing only two smaller contracts totaling about $6 million over the two years to provide energy to unmetered street and traffic lights, and smaller government departments.
It still provides the network and in an ACT community-wide sense remains Canberra's majority supplier.
Government sources said the decision was ''ludicrous'' and could be ''severely embarrassing'' in this centenary year.
''This year is supposed to be about Canberra celebrating all things Canberra, and yet some bureaucrats have decided a local retailer that employs local people - and who, by the way, is spending big bucks on the centenary celebrations - is not who they want to be providing their own government's electricity,'' one said.
Another contact said that ActewAGL was outraged at the decision and is taking a fresh look at all of its substantial community sponsorships.
TAMS Minister Shane Rattenbury noted that such procurement decisions are not made by ministers and they do not contribute to the decision-making process.
''I understand that overall the evaluation team concluded that ERM presents the best value for the ACT government, for the contract which the firm has been awarded,'' he said.
''The evaluation team comprised officials from several directorates.
''ActewAGL is a big contributor - and a valued one - to the community in the ACT and I look forward to that continuing.''
The acting chief executive of ActewAGL, John Knox, said although it was unsuccessful in winning the full portion of the tender, it stood by its competitive position in the ACT.
He said that was evident in ActewAGL's steady growth in customer numbers.
''We remain committed to our customers, to supporting our local community through our sponsorship program, delivering excellent customer service and helping our customers manage their energy costs,'' Mr Knox said.
''We will continue to be the proud principal partner of Canberra Centenary and are pleased to celebrate this milestone with our local community.''
Mr Knox did not directly answer when asked if any sponsorship it provided the ACT community would be reduced or terminated.
Canberra Centenary executive director Jeremy Lasek said ActewAGL had told him it would not be reducing its sponsorship to his organisation.
''ActewAGL remains the principal partner and we are totally thrilled to have their support,'' he said.
TAMS's director of the ACT Property Group, Daniel Bailey, said ministers were not informed of the tender outcome until after the decision was made. He also said that as part of its contract, ERM had committed to providing community sponsorship in the near future.
Mr Barr could not be contacted for comment.