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Power supplier pledges support


Chris Johnson

ActewAGL's corporate headquarters in Civic.

ActewAGL's corporate headquarters in Civic.

The Queensland-based energy retailer that successfully snatched a contract from ActewAGL to supply the ACT government with electricity says it is committed to sponsoring local organisations - but it will not say how much.

Fairfax Media this week reported that ERM Power Retail won a $16 million tender to deliver electricity for two years to the government's larger offices and to its hospitals, jails and schools.

It is the first time ActewAGL has lost the government contract, but it won two smaller tenders totaling about $6 million over the same period to continue providing energy to unmetered street and traffic lights and smaller government departments.

Some inside government are astounded that the evaluation panel led by the Territory and Municipal Services Directorate snubbed the local company that is part-owned by the ACT government.

Others, however, said ERM came in at such a good price that it easily beat the local business.

ActewAGL is a major sponsor of local events and organisations and is a principal partner of this year's Canberra centenary celebrations.

A condition of ERM's contract is that it also provides local sponsorship.

But in answer to questions from Fairfax Media, the Queensland company's chief executive of electricity sales, Mitch Anderson, would not put a dollar figure on the sponsorship commitment.

He confirmed that ERM would sponsor community organisations in the ACT as a result of the electricity sales agreement with the government.

"As an electricity retailer which is licensed to operate in every Australian state, the ACT and the Northern Territory, ERM Power is proud to contribute to the communities in which it operates through partnerships and sponsorship programs," Mr Anderson said.

ERM also provides power to some federal government sites in Canberra, but Mr Anderson would not say if the new ACT government contract, which started on January 1, would result in an office being opened here or if jobs would go to local people.

"We already supply more than 450 Australian government sites in the ACT," he said.

"After just five years of operation, we have become the fourth-largest retailer in the national electricity market and are expanding into the small- to medium-enterprise market.

"The quality of our ERM Business Energy service offering was confirmed last year when we were rated the No. 1 electricity retailer for customer service to business."

Meanwhile, ActewAGL insists no local jobs or sponsorship will be jeopardised as a result of it losing the ACT government contract.

Sources said the local power retailer had sought legal advice on what sponsorship deals it could get out of.

But ActewAGL's director of marketing, Paul Walshe, said that was not the case and that all arrangements would stay in place.

"We are very disappointed that we lost that contract,'' Mr Walshe said.

''The energy retail business is a pretty tough business and can be quite cut-throat.

"You win some and you lose some. We have lost comparable and even slightly bigger contracts than this in the past, but this is the first time we have lost the ACT government contract.

"But this is not going to impact on jobs at all and our sponsorship program will stay in place."

ActewAGL employs about 750 people and has an annual sponsorship budget of about $1 million.

In addition to that, the local power retailer has committed $1 million from its shareholder dividend for the Canberra centenary.

"The centenary is not about the ACT government, it is about the people of Canberra celebrating a very special event after 100 years. You only turn 100 once," Mr Walshe said.

More broadly, he said, the Canberra community would be at a disadvantage if the company said it was not going to support this or that because it had lost a contract.

"We want to win the contract back in two years' time, but in the meantime, we have just secured some new contracts locally and interstate which helps offset this loss,'' he said.

"That's the game we're in.''

Mr Walshe said the ACT government contract was a substantial contract to lose, but life went on.


  • I would like to know who in the ACT Government was astounded by this decision and why would they care? Was it the people working in the centenary celebrations who are reliant on ActewAGL sponsorship? If so what a stupid idea is it that the ACT Governenmnet should pay more in energy to get less sponsorship money in return.

    This is a good day for competition. People who buy local are worse off!

    Not the ACT Government
    Date and time
    January 18, 2013, 10:19AM
    • I love it when they say there will be no job losses, $16M is a lot to get back on a lost contract and it will have to be picked up somewhere.

      Date and time
      January 18, 2013, 11:49AM
      • Personally I'd prefer lower bills to paying extra to provide for sponsorships. Hint ActewAGL, hint.

        Date and time
        January 18, 2013, 12:05PM
        • If they can afford to lose such a large contract and not offload some staff, then the remaining contracts are going to have to pay for the extra fat. Sounds a bit like Government to me and that an expensive monopoly has been broken with the consumers the winner.

          Date and time
          January 18, 2013, 1:56PM
          • Actually as ActewAGL is not a generator of electricity (of any significance, if any), and basically a reseller, being able to take the loss of such a contract without any notable impact (if you believe what we have been told), it has to make you wonder how much we have been and may be presently over charged. I wonder if they are sourcing the majority of the power they supply from el cheapo sources like brown coal in Victoria, and then charging us for more costly (cleaner) sources and pocketing the difference.

            Date and time
            January 18, 2013, 6:38PM
            • Hey I'm happy with ERM Power CANBERRA INTERNATIONAL DRAGWAY instead of ACTEWAGL Canberra International Dragway.

              Nitro Gangster
              Date and time
              January 19, 2013, 10:48AM
              Comments are now closed

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