Retail energy market distrust could benefit LPE 

LPE’s underlying business isretailing electricity to medium and high density residential / stratacommunities in Queensland. In response to customer demand, LPE has broadenedits market from Embedded Networks to include Direct Market Customers in stratacommunities. The Australian Energy Market Commission’s recently released 2018Retail Energy Competition Review indicates that consumer confidence in theenergy market working in their long-term interest had collapsed from 25 percent to 10 per cent in a year, and trust had slipped from 50pc to 39pc, withbig power companies’ efforts to improve the clarity and fairness of theirretail offers being too little too late.  Of the nearly 6,000 offers available to consumers, at least 57 per centinclude a conditional discount, and only 25 per cent have an unconditionaldiscount. In addition, when conditions on discounts are not met, or a limitedterm of the discount expires, customers revert to standing offers. In thisenvironment, comparative shopping on sites such as “Compare the Market”,“finder.com.au”, and “iSelect” becomes very difficult.   Australian Competition and ConsumerCommission Chairman Rod Sims is due to report on the retail energy market laterthis month; according to press reports he has the “enormous profits” of the bigthree – AGL (ASX:AGL), Origin Energy (ASX:ORG) and Energy Australia – in hissights.  In a recent (12 June 2018)presentation, LPE indicated that its retail offering compares favourably toindustry benchmarks. See graphs below. We believe smaller, nimbler retailerslike LPE could gain market share where cash conscious consumers areincreasingly looking for transparency, service, and above-all, cheaper billsfrom their electricity providers.