Enova Energy spared from liquidation by deal with fellow small retailer – EQ Mag Pro

Enova Energy, whose ground-breaking community retailer business was forced into voluntary administration last month as a result of Australia’s energy market crisis, has dodged liquidation through an arrangement with fellow small retailer, Energy Locals.

In an update on Wednesday, administrator Simon Cathro said creditors for Enova Community Energy and Enova Energy had voted in favour of a Deeds of Company Arrangement (DOCA) that would see both entities avoid liquidation while also delivering a better outcome to creditors.

The Byron Bay-based Enova, Australia’s first community-owned energy retailer, went into voluntary administration in June, as a result of the energy crisis that has seen wholesale prices soar, and in a market deliberately designed to protect the huge fossil fuel incumbents.

The devastating outcome for the company, which was first established to provide the NSW Northern Rivers community with cheap, locally generated renewable power, saw its more than 13,000 customers switched over to big gen-tailers under the energy regulator’s “retailer of last resort” mechanism.

As part of the new deal approved by creditors, however, Enova customers are being urged to switch from their appointed retailer of last resort – likely either EnergyAustralia or Origin Energy – over to Energy Locals.

In return, Energy Locals – itself an upstart, renewables-focused retailer now under the management of Quinbrook Infrastructure Partners – will make a payment to Enova for each of its former customers who signs up.

“This is the outcome we recommended and have been working towards with Enova,” said Cathro & Partner’s principal Simon Cathro in a statement on Wednesday.

“To date, Energy Locals have had a great response from previous customers of Enova switching away from the Retailer of Last Resort and moving to connect with Energy Locals.

“With these previous customers doing this, this results in funds being contributed towards the Enova DOCA and paying a greater return to creditors in Enova Energy,” Cathro said.

Enova managing director and CEO Felicity Stening said the arrangement was a positive step forward in what had been a disappointing and sad time.

“Today we made a plan forward to deliver a good return for creditors,” Stenning said.

“While we are deeply saddened by the events over the past few months, we are determined to meet our obligations and ensure our stakeholders are looked after.”

Energy Locals, which started out the New South Wales and Queensland markets, has positioned itself as a consumer focused alternative to the Big Three gen-tailers, offering transparent electricity deals at “wholesale” market prices.

As far back as 2017 – the last time wholesale electricity prices jumped skyward – the company called for an investigation into market practices that manipulated prices and “hurt” customers, in a submission to an ACCC inquiry into retail electricity supply and pricing.

In the current energy crisis, Energy Locals co-founder and CEO Adrian Merrick has again been vocal about the shortcomings of both the retail and wholesale markets in Australia, and the impact these have had on consumers.

“Losing Enova to this current mess is a real shame,” Merrick said last month. “They had good passion and a great green focus.

“I hope we can work with some of the Enova team and their customers in some way to continue the good work they started.”

Source: reneweconomy