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Dear Flatchatters
Can anyone shed light on the practice of “bulk purchase” of electricity for Common Property supply?
Who are the “electricity brokers” and how are they regulated?
Do Strata Management companies have financial relationships with these brokers?
Are strata management companies being approach or seeking out these relationships with solar/EV installations companies?There are genuine opportunities when negotiating in a larger pool, the issue is: is it actually delivering for consumers, is it completely transparent, are their conflicts of interest etc.
The fiduciary duty owed by strata managers to an owners’ corporation is the determining principle.
The energy transition is an opportunity to bring transparency to the strata resident/owners.
People are taking an interest because of:
(i) the cost-of-living pressures;
(ii) they want to put climate action into practice in their home environment;
(iii) strata is increasingly your permanent home, not a temporary rental situation.
(iv) unlike investors, owners occupiers cannot simply depreciate or negatively gear their costs and must pay attention to value for money.
In the EV charging market there are new 3rd parties providing load balancing and billing services. There is movement in this market. If this another service that strata management companies are likely to invest in on the path to “horizontal integration”.
Grateful all insights.
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Do you mean what are termed “Embedded networks”
Embedded networks are where an energy retailer or the Owners Corporation buys electricty in “bulk” and then on sells it to tenants
I cant think of any other way for a strata to “bulk” buy electricity
Embedded networks are a source of discomfort for many owners. There are good embedded network contracts and there are bad embedded network contracts
Its not easy to change from one to the other.
Yes, they are a form of embedded networks but the most benign. There are protections under the law that allow individual owners the freedom to choose who their energy suppliers are. So if the “bulk bought” energy isn’t onsold at a competitive price, the consumers can go elsewhere, even in apartments.
The reality is that a good deal will see all the energy used in running the building be bought at a discount and consumers benefitting from reduced domestic charges too.
Some strata managers are even bundling different buildings together to get even greater reductions. For once, there are deals that aren’t too good to be true.
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…Some strata managers are even bundling different buildings together to get even greater reductions. For once, there are deals that aren’t too good to be true.
However, you do need to be careful. As an EC member who kept a close eye on our electricity accounts, I was surprised one day to hear from our retailer that they had had a request to hand us over to a different retailer (which they are obliged to comply with). It turned out that the managing agent had included us in a bulk deal without our knowledge. The new deal was likely better for buildings with higher consumption but it was not a better deal for us. While the c/kWh rate was marginally better, the daily supply charge was considerably higher. It took considerable effort to reverse.