Electricity competition switches on

ABOUT 4000 Tasmanian small businesses will be able to switch electricity provider for the first time, but there is no sign of households getting the same choice.

ERM Business Energy announced yesterday it would compete with the state-owned Aurora Energy for small business customers who consume between 50 and 150MWh of electricity a year - about $10,000 worth.

Although the small business market has been open to competition since the start of 2011, the Queensland-based company is the first to compete with Aurora.

ERM Business Energy chief executive Mitch Anderson said they had expanded into New South Wales, Victoria and South Australia since setting up the billing and support systems to handle smaller customers.

"This is simply a natural extension," Mr Anderson said.

Mr Anderson said the lack of competition in the wholesale market - Hydro Tasmania is the sole energy generator - had put businesses off the Tasmanian market.

"It's just that the regulator can zap your margin with the stroke of a pen," Mr Anderson said.

He said it was doubtful the company would be able to offer deals for residential customers when Tasmania goes to full retail competition in July.

"It's a possibility but we certainly make no promises," Mr Anderson said.

Energy consultant Marc White welcomed the arrival of ERM and said he hoped more retailers would follow.

"We're seeing some positive signs from much smaller players than ERM," Mr White said.

However, he said there was not the same level of interest in the residential market.

"We still have concerns that we're not seeing any obvious interest," Mr White said.

The sale of Aurora Energy's residential customer base collapsed last year, but the government decided to go ahead with the introduction of full retail competition from July.

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