| Ombudsman's report
Challenge, change and choice
As we review the past year and look to the future, we believe the theme of this year's report - challenge, change and choice - reflects the environment for energy and water consumers in New South Wales.
Challenge: maintaining affordable services
We have all become aware that essential utility services of electricity, gas and water can no longer be taken for granted. Sustainability issues dominate the media, political and community discussion. There is a challenge for each of us as consumers to do what we can to conserve these precious resources.
There is a challenge for government and regulators to ensure that sustainability measures such as pricing do not put these essential services beyond the reach of disadvantaged consumers. The challenge for all of us is to develop a comprehensive community-wide approach to ensuring the sustainability of essential utility services without any consumers being left behind.
Change: ensuring it is for the better
New South Wales consumers now have increased choice in utility supply, from a range of energy retailers whose names may not be immediately familiar. The company that sends the bill may be different from the company that delivers the electricity or gas to domestic and business premises.
Customers who ring their retailer with a query may find themselves speaking to a call centre in another state, as some retailers trading in the national energy market centralise their operations outside New South Wales.
Federal and state authorities are engaged in a significant undertaking to establish the legislative framework for a national energy market. While this 'big picture' activity might not have an immediate direct bearing on consumers, it is likely to change the shape of utility services in New South Wales and across Australia, particularly as an important aspect of this work is the establishment of a national consumer protection framework.
Choice: aiming for positive consumer experiences
In New South Wales we have had a choice of electricity or gas retailers for several years, and some competition in water is now being proposed. This choice has increased the options available to consumers who can now select 'dual fuel' (electricity and gas from one provider) or 'bundled' products (when an energy provider also offers other products or services), or they can tie-in their energy contract with other services (eg phone).
While choice is intended to provide consumers with price benefits and service delivery options, it can also present them with new challenges.
Some consumers have been confused by the choice available. They have found it difficult to compare offers or assess green energy alternatives. Some have taken up an offer then found the bills they receive are complicated and hard to understand. Their confusion is increased when the information is in small print or only available in English (which may not be their first language).
Consumers need to be even more vigilant about checking their accounts and contacting their provider if they have any queries.
Providers need to consider the diverse needs of our community and ensure
that information about energy choices is readily understood.
Customer complaints in 2006-2007
This year EWON dealt with 8641 complaints, which represents a 13% increase from last year.
Given the number of customers in New South Wales and their transactions with energy and water providers, I am pleased to acknowledge that this represents a comparatively low level of complaints.That said, customer complaints to EWON are a significant barometer of issues for utility providers.
Retail competition complaints
This year we saw a 50% increase in complaints about retail competition (energy marketing, account transfers, contract issues). While again it should be acknowledged that the number of complaints we receive is relatively low compared with the number of customers who switch retailers, the nature of the complaints continues to be of concern.
We are still receiving many complaints about misleading marketing, particularly to vulnerable people who may have health or language issues, or an intellectual or other disability. We continue to advise the Independent Pricing and Regulatory Tribunal about marketing issues and raise concerns with the individual retailers.
In other cases, customers who have signed a contract with another retailer have experienced significant delays in the transfer of their account or they have been double billed, and this has resulted in a complaint to EWON.
Some customers had their account transferred or cancelled in error and called EWON to find out who was supplying their electricity or gas. It is pleasing to note that retailers have taken these complaints very seriously and are working to reduce them.
Affordability related complaints
We continue to see a downward trend in customer complaints about credit issues such as difficulty in payment and impending or actual disconnection of supply. We believe utility providers' customer assistance programs have played, and will continue to play, a positive role in this downward trend. As these programs have grown and matured, providers have seen their financial value in recovering arrears and reducing debt recovery costs.
Moreover, both customers and providers benefit when realistic and affordable payment arrangements are put in place. Providers understand that unrealistic demands result in defaults on payment arrangements, and that it is better to recover smaller amounts over a longer period rather than little or nothing over a shorter period.
Specialist staff have been recruited and trained for the programs, and customers and their advocates appear more confident in dealing with them directly rather than having to contact EWON for assistance.
While the downward trend in affordability matters is encouraging, our complaints indicate that some customer hardship cases are being missed by call centres and are not referred to the assistance programs. This year we were contacted by 1121 customers who had been or were facing disconnection because of financial difficulties.
Looking to the future we hope to see the positive impact of customer assistance programs reflected in a decrease in the overall disconnection rates for electricity and gas in New South Wales, as these rates have been too high for too long.
Customer service complaints
Complaints about poor customer service increased this year. Some customers said they contacted EWON after they had tried to resolve a problem directly with their supplier but their calls were not returned, their letters went unanswered, or they felt they had been treated with indifference or disrespect. In some cases their provider had not given them necessary information or it was supplied in a form that they could not understand.
Strategic activities
Community information
For all the customers who contact EWON about an energy or water issue, we know that unfortunately there are many more who are not aware of our services. As outlined in this report, EWON has a very strong commitment to community outreach, yet there is clearly much more to be done to ensure that consumers can access our services. We will continue to work with member providers, peak bodies and frontline community agencies and advocates to increase public awareness of EWON.
National perspective
As well as our collaboration with other New South Wales complaint handling agencies, we have continued to work closely with other energy Ombudsman offices through the Australia & New Zealand Energy and Water Ombudsman Network (ANZEWON).
In the context of a national energy market and with utility members in common, ANZEWON has worked to achieve as much consistency as possible in our operations, while recognising that some differences will be inevitable because of state jurisdictions.
We have also been an active member of the Australian and New Zealand Ombudsman Association (ANZOA). This broad network of both industry and statutory Ombudsman offices enables exchange of information and ideas about best practice operation.
Development of a national consumer protection framework for utility customers is a major challenge for industry, consumers, government, regulators and Ombudsman offices.This is because each state has developed different regulatory models and assistance schemes for utility consumers (eg different pensioner rebates and financial assistance schemes).
From an Ombudsman perspective, our ideal is to take the best elements from each jurisdiction for the national framework, rather than any 'lowest common denominator' approach.
Electricity and gas are essential services that consumers cannot do without. There can be no compromise on consumer protection and we need to ensure that the 'essential' nature of the service is not degraded if it is repackaged or bundled with other products.
In our submissions we have emphasised that as an essential service energy-
specific regulation is needed, rather than making energy fit into generic consumer protection frameworks.
Thank you
EWON can only continue to offer high-quality dispute resolution services because of our highly professional staff. I wish to thank everyone at EWON for continuing to do a difficult job with great skill, grace and commitment.
Thank you to the EWON Council and Board, and all industry, government and community stakeholders, for supporting EWON as the independent utility dispute resolution body in New South Wales.
Our partnerships help us to keep essential services within reach of everyone.
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