Still competitive despite contract loss

Tasmanian distributor Aurora Energy said it still highly competitive despite losing a contract with the Tasmanian Health Department to a competitor.

The Tasmanian Health Department “dumped” Aurora Energy to buy cheaper power from a Queensland company in a deal worth $18 million, according to an ABC News report in February.

The Health Department is the eighth government department to take advantage of the competitive interstate electricity market, purchasing power from the cut-price gas-fired energy company ERM, the news publication stated.

Aurora Energy chief operations officer, Mike Brewster said the company is still competing successfully in the electricity market, retaining 85 per cent of Tasmanian customers who are eligible to choose other retailers.

Mr Brewster said that while it was regrettable to lose any customers, the loss was balanced by gains interstate.

“Aurora sold 8.6 per cent more energy in 2009/10 than the previous reporting period,” Mr Brewster said.

“While some may be surprised that Aurora does not have 100 per cent of the Tasmanian market, we have been operating in a contestable market for several years and have retained 85 per cent of those customers who are able to choose alternatives, which exceeds our expectations.

“Aurora has a responsibility on behalf of the Tasmanian community to balance the risks associated with locking in long-term energy deals on small margins in a volatile National Energy Market.

“We will not chase market share where the risks and costs outweigh the benefits.

“Those who are concerned at the loss of the Tasmanian Health Department to a competitor can be reassured that the Victorian hospitals deal we won is valued at many multiples of the Tasmanian Health Department contract.

“The Victorian hospitals deal was won in what is globally the most competitive energy market.

“Furthermore, we have won a number of other big customers interstate including a national retailer and some major industrial customers in Tasmania have returned to Aurora,” he said.