POWER JOLT
Ergon connection fees put squeeze on business
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