WEL Energy Trust chair Mark Ingle. Photo / Supplied
WEL Energy Trust chair Mark Ingle. Photo / Supplied
This year's discount to residential power customers of WEL Networks Ltd will be the last. Instead, customers can expect a reduction in lines prices and there will be an increase in WEL's community grant programme.
The final discount, which totals around $18 million per annum or on average $158 excluding GSTper residential customer, will be paid in April or May, the company says. The company is totally owned by the WEL Energy Trust on behalf of the community. The trust issued a statement supporting the move.
In 2019 the discount will finish, but the $7 million price reduction on WEL's residential lines charges to retailers will continue while the community grant programme and investment in the community will increase, the statement said.
"By ending the discount programme there will be greater transparency for customers, lower lines prices for residential customers and more investment in the community now and into the future. We're finishing a discount programme that was relevant to the old system, but isn't relevant today," said trust chair Mark Ingle.
The trust says it will track the results it is looking for in terms of better pricing including the 25 per cent of the bill that is WEL line charges.
The announcement this week raises a number of questions which WEL has answered as follows:
1. Why have you taken the decision to end the discount programme?
Rapid change to the industry, such as the increasing use of solar energy and customers being able to trade their power usage means we as a Trust have to create the change we wish to see. We also want to invest more into the community. This is about reaching and benefiting more of the community. It's also a more transparent way of working.
There will be lower lines prices charged to retailers for residential electricity customers, and there will be more investment into the community through grants. WEL are investing in ways to give customers more choice, to reduce peak load demand, and to reduce power charges. The net result over time will be a positive outcome for the company, electricity customers, and the wider community.
3. What are the benefits to the community going to be?
The Trust currently grants approximately $2M — $2.5M each year into over 250 community organisations. There will be a three-fold increase in our ability to support these organisations and initiatives.
4. Why aren't we getting the full discount returned in lower prices?
The residual discount will be invested in ways that will effectively reduce pricing over time and provide increased benefit to the community now and into the future.
5. Why has the discount become a problem for the company?
A 'discount' is not the best way to manage pricing, it hasn't had the impact we wanted over time in terms of lowering electricity prices overall, and it's not transparent.
6. Are you doing this to fund legacy projects? And what gives you the right to decide how customers spend their discount, or how excess funds are used?
Our responsibility and mandate is to ensure we best meet our mission to grow investment for our community (including electricity customers), now and into the future.
7. Did you consult with the community or other stakeholders about this?
Yes, this thinking is informed by the development of our long-term strategy. The strategy work involved 12 to 18 months of engagement, listening and challenging ourselves regarding what role the Trust can and should play in our region's future.
WEL Networks Ltd chairman Rob Campbell. Photo / Supplied
8. Aren't Trustees going against their election pledge of committing to 'discounts and grants'?
Both grants and discounts will be delivered for two of the three years of the current electoral term.Through the long-term strategic plan that was adopted in 2017 prior to the election, Trustees committed to continue to review investments and business structures to ensure they are best fit for purpose, including the level of liquidity the Trust requires to action its strategic intent. The discount programme has been part of this review.
9. Do you understand how difficult it is for people on low incomes to pay power bills? And what about the hard-working middle class?
Trustees are acutely aware of the challenges faced by many in our community. Having a positive impact on that is at the heart of the Trust's Vision and Mission.
10. What initiatives are underway to reduce prices?
OurPower is a key example. OurPower is a project that is being developed out of a belief that electricity prices are too high. By introducing systems which significantly reduce retail costs we're able to drive down the cost of electricity, giving consumers real choice in the market. In future, there is no reason this could not be expanded to include solar, or even gas provision.
11. Are you selling the company?
No, this decision has nothing to do with shares in the company. The Trust believes that retaining a controlling interest in WEL Networks is beneficial in ensuring the company retains a strong sense of social responsibly, and in growing investment in our community. This is embedded in our long-term plan and Statement of Investment Policies and Objectives (SIPO), and hasn't changed.
If however, something happened that caused the Trustees to believe the correct course of action was to bring on a new investor then a public consultation process would be required before any decision was made.
