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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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Bluebottle,

Well, we are on the same page with solar and windmills.

Private companies are entitled to advertise to attract customers (although I think switching to 'better' prices is a con, and I'm sticking with AGL). But, are you saying that the Qld government is advertising electricity that they are supplying to you, even though they have no competition in your area? That would be on the nose.

Hasbeen is a Queenslander. He might have something to say - apart from expressing his opinion of AGL:).

I note that there are private electricity retailers in Qld.
Posted by ttbn, Thursday, 20 February 2020 6:55:46 PM
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Power in South East Queensland is generated and supplied (poles and wires) by the government owned Energex. The electricity is on sold to a multitude of private retailers, like AGL, Origin etc, who on sell to the consumers. The retailers have no control over supply, if there is an outage in an area, it applies to all consumers in that area regardless of which retailer they are with. The communication the customer has with the retailer concerns their bill, not the supply.

I would advise anyone here to take advantage of the government rebate on solar which is $3560 on a 6.6kw system, which meets most needs. With a decent energy buyback price from the retailer (no lock in contract) of up to 20c/kw hr. Some consumers should get a small refund from time to time, which helps to offset the cash contribution of the consumer, about $4,000/$5,000 for the best quality solar system. The system should be guaranteed for 25 years.

The alternative could be for ScumO' to pump billions of taxpayer dollars into expensive coal fired power, and the consumer can pay ever increasing costs, both through taxation and the retail buy price.
Posted by Paul1405, Friday, 21 February 2020 7:29:32 AM
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Don't expect any guaranteed for 25 years on any solar system. You have to remember the old adage, if it sounds too good to be true, it damn well will be.

Like the rort right now with car companies wanting to buy back older cars with faulty air bags, rather than source a replacement, but offering only a pittance for them, Solar panels will be no better.

A panel that will be giving adequate service at even 20 years has not been made yet, & any manufacturer warranting their panels foe 25 years is conning the public. When they start failing the manufacturer will be long gone, & the installer company will have gone broke early in the piece.

Our local SES people are getting to hate solar panels. Not only can damaged panels be dangerous to their people on a roof, but they are getting a lot of calls where shonky installation jobs are causing leaks in once perfectly good roofs.

After the 4 inches over night rain recently, many of the expensive new homes in the adjacent acreage estate were sporting SES tarps for quite a while.
Posted by Hasbeen, Friday, 21 February 2020 2:08:12 PM
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In SE Queensland we have a range of power retailers to chose from.

About a year ago after my power bills kept climbing quickly I did some searching. I cut my bill from over $1100 per quarter to low $700, & am much happier with the supplier. Yes Bluebottle the state still does the generation & distribution, but individual companies do the retail selling, & there are very large differences in their charges.

Out here in the bush I have 7 pump systems to supply drinking water from 2 tank banks, garden waste, 2 grey water systems, plus the swimming pool. We use a lot of electricity, & don't like getting ripped off.
Posted by Hasbeen, Friday, 21 February 2020 3:37:24 PM
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Hassy old cock, easy question for you, what is your daily connection charge and what is your Kw/hr charges?

Funny with very heavy recent rain in Brisbane, and worse in Sydney (I asked my son), and we don't see tarps on roofs around Brisbane or Sydney. It must just be in your area where houses are sporting SES tarps for quite a while Hassy. Not familiar with a SES hate campaign against solar panels, they have been around for many years now. As for your derision of the life expectancy of solar panels, you are most likely not up to date with the latest technology and life expectancy of panels today.

And for saying; over $1100 per quarter to low $700, & am much happier with the supplier. Yes you should be $400 happier, other than the bottom line, there's not much an electricity retailer can do to make you happy. I suspect you were an "old customer" of the first retailer and didn't question the cost of electricity supplied, so they just charged you the premium rate. BTW don't expect your $700 bill to stay at $700 for too long once ScumO' has you paying for ultra expensive electricity from his high cost dirty coal fired power stations the Coalition plans to build with taxpayer money.

Just to add, its noticeable that electricity retailers exposed to buying high cost coal produced power are of course charging the consumers the highest rates. Wha does that tell you?
Posted by Paul1405, Friday, 21 February 2020 4:45:28 PM
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Paul an 80 knot thunderstorm, [knots not kilometers], will do that to roofs.

I had an old greenhouse converted to a shed have some of one side blown in. It has stood for 20 years, with no trouble. The windbreak of trees on 3 sides has helped, but this was the first time such high wind, [not unusual actually, & we have had higher] has come from due west.

So much damage was done in this one that the insurance company is offering higher than repair quotes in cash pay outs to get rid of some. I reckon we can do the repairs for about half the quotes they have received, & get it done now, not in 3 months time, so I'll probably take a payout.

It has done a lot more damage than stronger storms due to the unusual direction for really strong winds. I have seen the odd southerly buster do similar damage in Sydney, & that was before solar panels.

South east Queensland, like much of the state is not for sissies. The last one a couple of years knocked down 6 of 30 meter gum trees in the 2 mile stretch between me & the main road. It took about 3 hours for a dozen or so of us with chain saws to clear enough for people to get in & out. It also took over 5 days to get power back on to all in the district, the reason many of us own 10KVA or larger generators.

Incidentally hat tip to Energex, despite huge insurance claims for the damage, no one in this district lost mains power in this one. Only roof damage cut power to a few.
Posted by Hasbeen, Friday, 21 February 2020 8:22:07 PM
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Glad you cleared that one up Hassy, a bit more to it than just 4" of rain, ah. I do suspect you were ripped-off by your first retailer. Its not uncommon for long term customers not to question their bill, and for the retailer not to alert them to new cheaper offers they are making.

The technical improvements in solar panels over the last few years has been amazing. What you have said about your electricity consumption, you would be ideal for a solar instillation. I honestly can see you saving another $500/quarter. And with the government sub of say $3600 you would be laugh'n!

Hassy me old darling, I to now reside in South East Queensland, like you in Joh's country, well Brisbane, is Brisbane considered Queensland? We well could be neighbours, how about that! You and I could chew the fat over the back fence discussing all these topics personally, like we do on OLO, wouldn't that be thrilling? You could ever bring that old fart mate of yours from down the road with his rain gauge to discuss world climate change. Such joy!

BTW; How are the chooks?
Posted by Paul1405, Saturday, 22 February 2020 6:03:27 AM
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