CEO Update – 13 July 2016
CEO update to Melbourne Market Business Principals
As businesses operating within the Melbourne Market, I’m sure you’re all at times, approached by suppliers to the industry offering better deals, competitive rates and price matching. As operators of the Market, we want to ensure all Market businesses are equiped with the tools to evaluate these offerings, and in turn, make decisions that will benefit your business.
I understand there is some confusion when attempting to compare WINenergy’s pricing versus other energy providers. In this update, I provide you with the detail required to assist in interpreting your utility bills and share with you an update on the proposed Dandenong Market and Distribution Centre.
Understanding energy charges
Getting the best offer
When the Melbourne Market Authority (MMA) selected WINenergy as the energy provider for the Market, it was done on the basis of competitive prices and simple billing (via a bundled billing service).
As energy supplies fluctuates from time to time, the MMA regularly compares the rates of the major energy suppliers to ensure WINenergy’s rates are amongst the most competetive available in the market.
When reviewing competitor rates, it’s important to note the following:
- While other providers may quote lower peak rates, a large portion of energy usage for Market users occurs at off-peak times. This results in other providers ultimately being more expensive than WINenergy.
- Not all energy providers will service an embedded network, so ensure you notify the provider the site is on an embedded network when seeking a quote.
- Obtain all fees and charges for the supply and usage of electricity to enable a comparison of the competitiveness of the total offer.
Understanding bundled charges
When reviewing your energy statements, if you’re on a bundled package, your statement will only show three charges. These are peak, off peak and service charges. Despite only showing three charges, your bundled package is inclusive of a range of other charges such as environmental charges and metering charges.
If Market users are comparing energy offers from other suppliers, it’s important to ensure you’re comparing ‘apples with apples’. Therefore ensure you’re asking for a quote inclusive of all service charges. It’s also recommended you ask other providers to share any additional charges such as connection or new meter installation fees.
To help you understand these inclusive charges, an example has been included below showing a rate review for bundled and unbundled usage of up to 50MWh per annum (MMA data indications stores use an average of 31 MWh per annum) from WINenergy. Click on the image to view a larger version.
As you can observe in this example, while the peak and off peak rates vary significantly in the bundled package versus the unbundled package, the total cost is very similar, (there’s a modest saving of $452 per annum for the bundled service).
Cost recovery for infrastructure
The MMA invested significantly in onsite energy infrastructure at the Market, in addition to this, the MMA provide repairs, maintenance and replacement of this infrastructure as required to ensure the site continues to run efficiently.
While the MMA receives a percentage of the energy charges from WINenergy, these are reinvested back into site energy infrastructure and maintenance.
Want more information?
For further information regarding energy charges, you can contact WINenergy on 1300 791 970 from 8:00am to 5:00pm Monday to Friday.
Proposed Dandenong Market & Distribution Centre
A planning application has been submitted to the City of Greater Dandenong on land owned by Fendbrook Pty Ltd and controlled by property developer David Payes of Intrapac Projects.
The establishment of a second wholesale facility in Melbourne’s south east is not in the best interests of the industry as it is likely to increase costs for the sellers if they choose to maintain a presence in two locations. An increase in costs is unlikely to generate an overall increase in revenue as the customer base is simply split over two sites, as opposed to grown.
This proposed site is zoned “Green Wedge”. While the permitted use for this zoning includes markets, it prohibits warehousing. The MMA have lodged an objection with the City of Dandenong on the following grounds:
- The proposal is inconsistent with, and unsupported by the objectives of the Green Wedge Zone and relevant planning policy regarding the Green Wedge Zone.
- The land is within the Eastern Treatment Plant Buffer covered by the Environmental Significance Overlay Schedule 3 (ESO3). Exposure to odour from the treatment plant for extended periods of time is not consistent with the guidelines of ESO3.
- The proposal will have an adverse impact on traffic in the area with significant upgrading of surrounding roads required to accommodate truck traffic.
- The proposal has the capacity to result in significant adverse economic effects as it would undermine the centralised model for wholesaling of fruit, vegetables and flowers.
While there is a long way to go for this proposal to become a reality, the City of Greater Dandenong’s Council will be considering the planning application in the very near future. The MMA encourages anyone with concerns about the proposal to object to the planning permit application as soon as possible. The “objection to planning application” form is available on the City of Greater Dandenong’s website here.
The planning number is PLN/160072 and the address is 84 Harwood Road, Bangholme.
Again, I welcome all Market users to contact the MMA to discuss any of these matters further.
Chief Executive Officer
Melbourne Market Authority
Level 1, 55 Produce Drive,
Epping Victoria 3076