Another energy retailer shuts up shop: Is it yours?
With Power Club the 4th energy retailer to succumb to rising electricity prices, should you be worried about your own provider closing down?
The warning bells for rising energy prices continue to ring loud and clear as Power Club collapses under the pressure of rising prices.
In the last few months, we've seen Pooled Energy, Weston Energy and community-owned green energy retailer, Enova Energy, close down for similar reasons.
What's happening to Power Club customers?
Power Club is a small retailer that was providing electricity plans to customers in New South Wales, the ACT, Queensland and South Australia.
It had stopped accepting new customers in recent months but persistent wholesale electricity prices have caused it to cease its operations altogether.
Its website hasn't been updated yet but the CEO has left a voicemail for those calling Power Club about the company entering administration and the steps they need to take next.
The Australian Energy Regulator has initiated the Retailer of Last Resort process that will allow existing Powershop customers to transfer to relevant energy providers.
- Good to know. If you're an existing Power Club customer, don't stress out. Your lights won't be switched off as you're transitioned to another energy provider.
Why are energy retailers going bust?
Wholesale energy prices have skyrocketed in the last 12 months for 3 key reasons:
- The costs of coal and gas have risen globally, largely due to the war in Ukraine.
- Unplanned outages at coal power plants here in Australia.
- The surge in demand for energy during these colder than usual winter months.
Smaller retailers such as Power Club have been more susceptible to crumble under the pressure of rising wholesale electricity prices compared to larger retailers.
This is because they don't have their own power stations and are more exposed to rising costs.
It's why larger providers such as AGL, Alinta Energy, Origin Energy and Energy Australia have modestly increased prices after the 1 July electricity price reset compared to the smaller players.
Electricity prices officially rose on 1 July. Find out why.
Shop around and compare energy plans before switching
Whether you're with Power Club or any other energy provider, it's more important than ever to compare plans before switching. Don't let others make the decision for you.
Some points to consider while you're comparing:
- Look out for variable rate energy plans that are at least 10% below the government reference price, a benchmark set to help you compare plans.
- Look out for fixed rate energy plans that are below the reference price, although they are a rare find.
- Consider switching to a larger retailer for the time being as they may be a safer bet given the volatility in the energy market.
- Take advantage of plans that offer extra incentives such as rewards points or a free subscription to a streaming platform.
Ready to shop and switch? Compare energy plans on Finder to get started.
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