Fledgling energy retailer has charitable intentions
Every household pays power bills, but what if instead of buying from Enmax, Epcor or Direct energy, a consumer could pay the same price — or maybe less — and help out their favourite charity?
“I’ve had the model for a charity partnering system for some time, based both on the desire to help charities and an interest in being part of the electricity market,” said Carolyn Martin of fledgling retailer Sponsorenergy, which is set to launch Sept. 1.
The key holdback has been the need for an inexpensive automated billing system. The answer was Utility Network and Partners, a tiny Calgary firm run by Nick Clark which buys wholesale power and now handles billing for several other boutique retailers.
Clark also runs the Electricity Shop website, which compares prices of all providers. In the first eight months of 2012, the network’s average floating power price was 6.9 cents per kilowatt-hour.
“His umbrella system ties in exactly with what I had planned. Everybody wins, and this approach hasn’t been done before,” Martin said.
When Sponsor Energy launches, about 50 charities across the province will contact their supporters and suggest they consider switching providers. Groups like Calgary Meals on Wheels, the Calgary Food Bank and Boys and Girls Clubs have already signed up.
“This could really help charities. If a charity could get 100 supporters to switch to Sponsor, and each one used 600 kWh per month, that could translate into a $2,000 cheque each month to the charity,” Martin said.
Sponsor will offer one-year contracts for 8.6 cents per kWh. One-year contracts from commercial firms are almost 8.9 cents. Sponsor’s administration fee is $6.25 per month, which compares with fees of between $6.90 and $9 charged by the big firms.
Supporters can also choose to contribute a penny or two per kWh to greatly enhance their gift, says Martin.
“If out of 100 people, 25 opt for the extra penny and another 25 opt for the two cents, we estimate the charity could receive $8,000 per month, and that could make a real difference for them.”
The charities are not releasing any information to Sponsor, but simply providing their official charity registration number and allowing their name to be added to Sponsor’s website where they will appear on a list of choices.
“We aren’t asking the charities to do anything, just advise their supporters of this option. People who want to switch just have to click on the appropriate box,” said Martin.
As with new power customers for all firms, consumers have to provide their social insurance number so a credit check can be done.
Retail firms must guarantee that bills to the generators will be paid, and have the money to cover two months of estimated power use for each customer.
“I think this has been a barrier for small firms in the past. We have access to money to cover 10,000 new customers, but then we’ll have to go to deeper pockets. But there won’t be any delay in signing up customers,” she adds.
Andrea Brumwell, director of development for NeighbourLink Calgary, was one of the first to sign on with Sponsor Energy.
“I can’t see any reason why not, this could mean a lot of funding for us,” she said. Her group provides low income parents with diapers, formula and safe cribs.
“We sometimes run out of supplies and have to buy them, so this extra money will make a difference.”
Clark at Utility Network has been a constant critic of the way the big firms have the hammerlock on the province’s retail electricity system.
While his firm now offers small players the tools and support to play a role, raising public awareness has been a challenge.
“It is a slow grind. It is simply word of mouth and a grassroots build, and that takes time,” he said.
“But we do have a few thousand customers now located in over 300 communities in Alberta. And we are changing the retail landscape.”