POWER JOLT

Er­gon con­nec­tion fees put squeeze on busi­ness

Townsville Bulletin - - FRONT PAGE - TONY RAGGATT

NEW busi­nesses are be­ing hit by Er­gon with power con­nec­tion fees run­ning to tens of thou­sands of dol­lars.

The State Gov­ern­ment- owned elec­tric­ity re- tailer has been ac­cused of be­ing “anti- busi­ness” for de­mand­ing the large se­cu­rity de­posits.

While Mund­ing­burra MP Co­ralee O’Rourke says the con­cerns of busi­nesses are “le­git­i­mate”, Er­gon says its pol­icy com­plies with na­tional rules and that busi­nesses can pro­vide bank guar­an­tees if they don’t have the cash. The Townsville Cham­ber of Com­merce raised the is­sue with Ms O’Rourke af­ter com­plaints from busi­nesses.

Bakery on Prim­rose part­ner Frank As­p­land said Er­gon had asked him to pro­vide $ 30,000 to re­con­nect two premises, one for $ 20,000 and the other for $ 10,000, at Gar­butt and Mund­ing­burra.

“Where do you find $ 20,000 just to leave in ( Er­gon’s) bank ac­count?” Mr As­p­land said.

GOV­ERN­MENT-owned elec­tric­ity re­tailer Er­gon has been ac­cused of be­ing “an­tibusi­ness” for de­mand­ing se­cu­rity de­posits run­ning to tens of thou­sands of dol­lars to con­nect small busi­nesses.

While Townsville State Gov­ern­ment Min­is­ter Co­ralee O’Rourke says the con­cerns of busi­nesses are “le­git­i­mate”, Er­gon says its pol­icy com­plies with na­tional rules and that busi­nesses can pro­vide bank guar­an­tees if they don’t have the cash.

The Townsville Cham­ber of Com­merce raised the is­sue with Ms O’Rourke af­ter com­plaints from busi­nesses that their plans for ex­pan­sion had been stymied.

Bakery on Prim­rose part­ner Frank As­p­land said Er­gon had asked him to pro­vide $ 30,000 to re­con­nect two premises, one for $ 20,000 and the other for $ 10,000, at Gar­butt and Mund­ing­burra.

He opened the Mund­ing­burra premises, a for­mer Brumby’s out­let at the Ris­ing Sun cen­tre, af­ter the land­lord agreed to cover the cost.

“Where do you find $ 20,000 just to leave in ( Er­gon’s) bank ac­count?” Mr As­p­land said. “It’s anti- busi­ness. It’s not good for small busi­ness, it’s not good for Townsville and it’s not good for the econ­omy.”

Cham­ber board mem­ber Michael Ko­pit­tke said the is­sue had only just been raised with the cham­ber, pos­si­bly be­cause the econ­omy was im­prov­ing and busi­ness peo­ple were now look­ing to ex­pand or open new ven­tures.

“I’m con­cerned about the fact that th­ese large de­posits are stand­ing in the way of reopen­ing closed premises and re- em­ploy­ing peo­ple in Townsville,” he said.

Transworld busi­ness bro­ker Peter Braid said a re­cent deal to open a cafe in the CBD stalled due to a re­quire­ment for a $ 4500 Er­gon de­posit.

Ray White com­mer­cial agent Troy Townsend said Er­gon re­cently re­quired $ 16,000 to con­nect a 160sq m re­tail te­nancy in the city.

“It can cre­ate an ab­so­lute cash­flow night­mare for some­body want­ing to start a small busi­ness,” Mr Townsend said.

An Er­gon spokesman said the elec­tric­ity re­tailer was flex­i­ble on the amount paid, stat­ing its pol­icy was that the de­posit “will be no greater than” 37.5 per cent of the cus­tomer’s es­ti­mated an­nual bill.

Ac­cord­ing to Er­gon’s web­site, it re­turns small busi­ness cus­tomers’ de­posits with in­ter­est af­ter they have paid bills in full by the due date for two years. Large busi­ness cus­tomer de­posits are re­tained.

Ms O’Rourke said it was chal­leng­ing for small busi­nesses start­ing up and she did not want to see them fac­ing un­nec­es­sary hur­dles.

“I have raised this is­sue with En­ergy Min­is­ter Mark Bai­ley and also sug­gested I work with the cham­ber to or­gan­ise a meet­ing with En­ergy Queens­land,” the Min­is­ter As­sist­ing the Pre­mier on North Queens­land said.

“I have been ad­vised that Er­gon’s pol­icy com­plies with the Na­tional En­ergy Re­tail Rules and is stan­dard prac­tice across the in­dus­try. I have also been ad­vised that cus­tomers can re­quest a re­view of the amount of se­cu­rity de­posit at any stage which I would strongly sug­gest they do.”

Mr As­p­land said the monthly power bill at Bakery on Prim­rose, at Bel­gian Gar­dens, had soared five­fold to $ 2500 in the past eight years.

Editorial: page 26

IT’S NOT GOOD FOR SMALL BUSI­NESS, IT’S NOT GOOD FOR TOWNSVILLE BAKERY OWNER FRANK AS­P­LAND

Pic­ture: SHAE BEPLATE

HIGH VOLT­AGE: Bakery on Prim­rose part­ner Frank As­p­land.

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