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The Forum > General Discussion > Why do power companies advertise?

Why do power companies advertise?

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I don't know about others but I have never needed to know who supplies my electricity. There is no difference in the product whether it comes from Ergon, AGL or any other. So why do we have AGL now taking out very expensive prime time media advertising? They tell me about their 'good guy' employees who play footy, like a few laughs, drink beer, work with their fathers and hope AGL will give work to their family for generations to come. They describe themselves as 'energy farmers'.
There is not a single mention as to why I should be a customer of AGL. Certainly the prospect of dynastic, monopolistic energy companies overseeing vast tracts of photovoltaic panels and massive wind farms despoiling our beautiful landscape as far as the eye can see is of no appeal.
I suppose they can get away with it because there is little competition.
Posted by Bluebottle, Thursday, 20 February 2020 9:58:01 AM
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Hey Bluebottle,

Welcome to the forum.

Electricity supply in Australia has been privatised from the public sector to the private sector, but the timing of this was decided by the states themselves.

Privatisation means that it's no longer run by government, and private companies can establish a business to supply electricity to consumers.

Generally this means that because there is competition for your supply of electricity, you'll likely get a better service and pay less than when it was owned and run by the government.

With that in mind I think that depending on where you live, there generally is enough competition between electricity providers to fight for your electricity supply, hence advertising.

It may not seem be important who provides your electricity as the power itself that comes out of your wall socket is no different than anywhere else;
However some people care more about how the electricity was generated;
- For example: Some consumers might have a preference towards green energy, whilst other cunsumers might only care about the price they pay.

In this way different companies can entice different kinds of customers to their particular business model.

Also, because there is competition for your electricity supply this means that often there is room for you to negotiate directly with electricity providers in regard to the price they charge.

This means if you shop around, you will likely save money.

I hope this information helps.
Posted by Armchair Critic, Thursday, 20 February 2020 11:31:00 AM
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Thanks Armchair Critic,

Well actually no, that doesn't really help. For one, where I am, there is no competition and I have no option for there is no competition in power supply. I must buy power from the State owned power company. For two, square miles of PV panels and wind farms is a blight on the environment. If that is 'green' energy and they want to increase that blight, I am not impressed.
Thanks anyway.
Posted by Bluebottle, Thursday, 20 February 2020 11:44:30 AM
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Bluebottle,
In the 1990s, governments were very keen on privatisation. They thought the private sector would be able to do things more efficiently, reducing costs for everyone, and also there'd be a lot of money from the sale that could be used to invest in other infrastructure or paying off debt.

But things didn't work as planned, especially in the electricity sector. The generation companies had too much market power. Competing fiercely was far less lucrative than letting the electricity prices rise.

To alleviate this, the governments changed the rules so power companies sold direct to consumers. This reduced, but did not solve, the problem of market manipulation. And it also resulted in an extra opportunity to skim off a profit. Electricity retail has become very lucrative, hence the advertising.
Posted by Aidan, Thursday, 20 February 2020 1:20:49 PM
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Not sure why you worry about something that has no effect on you. You say that you have no choice anyway. Other people do have a choice, and they are the ones the advertising is aimed at.

Where do you live that you have to rely on "state owned power company"? I thought that all power retailers were now private.
Posted by ttbn, Thursday, 20 February 2020 4:05:41 PM
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Hello ttbn,

Well it does have an effect on us - any industry that can spend money like this is passing the cost onto consumers. I couldn't care who supplies the power as long as it is at the best price. Furthermore it seems these guys are proud about ruining our environment with solar and wind generation all over the countryside.
I am in Queensland where the state delivers the electricity.
Posted by Bluebottle, Thursday, 20 February 2020 5:52:35 PM
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