Enova Community Energy was Australia’s first community-owned electricity retailer. A social business was formed to facilitate community-owned renewable electricity generation and supply and keep money in the local economy. Enova was formed with the goal of reinvesting 50% of company income in the local community through a charitable foundation.
Enova was named “greenest retailer in the country” for 2022 by Greenpeace (5 stars in their Green Electricity Guide), CHOICE (highest ranking in customer service and environmental sustainability), Canstar (best ranking in green practices), and Finder (retailer of the year).
Enova’s customers and backers donated $180,000 to local causes.
Background
Enova Energy was launched as a renewable energy power supply company on June 1st, 2015. Enova Energy’s parent company, Enova Community Energy, was formed on May 25, 2015. For the most part, Enova Community Energy refrained from engaging in commercial activity. Enova Community Energy was created primarily to provide Enova Energy with the means to obtain money through the issuance of loans and equity in the form of shares. Multiple factors significantly impacted the energy market, resulting in our appointment and Enova Energy’s decision to cease operations.
AEMO stopped the National Electricity Market on June 15, 2022, when a wholesale price cap was set. Enova Energy’s Load Following Hedge contract, which reduced its wholesale price sensitivity, was to end on June 30, 2022. Due to the limited time to arrange new wholesale energy price hedges, the corporation would be very liable for astronomically high wholesale energy prices on July 1, 2022. State and federal regulations were changing frequently, complicating matters. There were significant coal and gas supply concerns, especially with Russian sanctions. While most of Enova Energy’s 2022 electricity supply was locked in, spot pricing affected cash flow.
Before bringing in Administrators, the Companies attempted other methods to survive. Unfortunately, all Enova Energy staff were laid off after the Administrators were appointed. Several employees were rehired as independent contractors to close the business, including mailing final bills, collecting payments, and closing the books. All 13,200 Enova Energy customers were transferred to a new retailer the day after Administrators were appointed.
How did we assist
As a result of the energy crisis, which has caused wholesale prices to skyrocket, and in a system that is structured to favour the large fossil fuel monopolies, Enova, Australia’s first community-owned energy retailer, voluntarily entered into administration in June.
We conducted a sale of the business and were able to assist the eventual purchaser, Energy Locals, in creating a Deed of Company Arrangement (DOCA) proposal which provided a better return to creditors and would prevent liquidation.
Creditors approved a new agreement that encouraged Enova customers to migrate to Energy Locals from their designated retailer of last resort, most likely Energy Australia or Origin Energy.
Outcome
Energy Locals, a startup focusing on renewable energy and now managed by Quinbrook Infrastructure Partners, offered to compensate Enova for each of its former clients that enrolled. Consequently, it was a major success for both businesses, especially given the economic climate.
Enova Energy survived because it was merged with Energy Local and because of this merger between the two companies, Enova Energy was able to survive and move forward.
