Ombudsman's report
by Clare Petre, Energy & Water Ombudsman NSW
Complaints this year
Complaints to EWON increased 3% this year, with our investigations staff closing 8913 cases (up from 8641 last year).
This upward trend is significant given that overall marketing activity in New South Wales slowed last year, a factor also reflected by the decrease in complaints to EWON about marketing practices.
Last year retail competition complaints eclipsed billing as the primary issue, however this year billing returns as the leading area of customer complaints to EWON.
Of greatest concern is the increase in complaints involving credit issues, in particular, complaints from customers who are facing disconnection or have been disconnected because of financial hardship.
Last year we had 1121 complaints involving disconnection due to non-payment, this year we received 1484 complaints, which represents a 32% increase.
Notably, we are also seeing an increase in complaints from customers who are disconnected in error when an account transfer between retailers does not go smoothly. Transfers in error can place, customers in crisis situations especially if they are faced with disconnection, a backbill or debt recovery action.
In the coming year we will continue to work with all stakeholders – member providers, government, regulators, community agencies – to address these affordability and transfer issues.
Reflecting on the past ten years
More than once over the years I have observed that the only certainty in the energy industry is change. This is as true today as when EWON opened its doors ten years ago on 9 June 1998.
Looking back, it has been an eventful decade marked by significant change for EWON and for the energy and water industries in which we operate.
In 1996 the Chief Executive of the Electricity Association of NSW informed the delegates to an industry conference that:
“In recent years there has been an increasing demand in the community for the provision of inexpensive, simple and readily accessible dispute resolution forums for consumers as an alternative to the formal legal system.
The NSW Electricity Ombudsman scheme has arisen as a voluntary initiative of the industry in the light of the heightened community awareness of the benefits of such a scheme, and the enthusiastic support of everyone in the industry who has been associated with the proposal.
The project has increased significance for NSW given the massive reforms which have taken place in the electricity industry and their likely impact on consumer issues. The ombudsman scheme will serve as a timely indicator to the community of the industry’s dedication to the welfare of its consumers in the move to a commercialised, competitive environment.”
These words are equally relevant in 2008, with the energy and water industries currently facing further significant reforms that will impact on consumers.
Our achievements
A tenth anniversary is an appropriate time to reflect on what difference EWON has made for customers and companies, and whether we have achieved the objectives of the scheme as stated in our Constitution:
- to receive, investigate and facilitate the resolution of complaints and disputes, and
- to assist in the avoidance of complaints and disputes
in the provision of energy and water services to domestic and small business customers in New South Wales.
Focussing attention on affordability issues
EWON has played a key role in focussing attention on the social aspects of essential utility services and the fact that in this day and age, we cannot have people living without light or heat because of affordability issues.
As soon as we commenced our service, we became aware of the hundreds of people disconnected or facing disconnection of their electricity supply, and the impact of disconnection on individuals and families.
We found that the credit departments of utilities tended to chase customers in a cycle of disconnection/reconnection/disconnection.
There were limited options for customers in financial hardship. We were regularly contacted by community workers who had unsuccessfully tried to negotiate payment arrangements on behalf of their clients. Disconnection rates in New South Wales were higher than most other states.
While there is certainly no room for complacency, it is pleasing to note that in ten years this fairly depressing picture has changed significantly.
Rather than dealing with credit departments, we now deal with utility providers’ customer assistance programs. Customers are offered realistic and affordable payment plans, energy saving advice, energy audits, Centrepay, referrals to NILS (No Interest Loan Schemes) and retrofit programs.
I believe that EWON has contributed to the changes in how providers view and deal with customers who are experiencing financial difficulty.
But such changes cannot be achieved in isolation. A key EWON message has been that keeping essential services within reach of everyone requires partnerships – between utilities, government, the community sector and EWON. The next ten years will bring renewed challenges.
With an increasingly tight economic climate, higher utility charges and the impact of emissions savings targets, these partnerships will be even more important.
Responding to change
Ten years ago residential and small business customers in New South Wales were supplied electricity by standard retailers based on geographical location. The extension of the retail market in 2002 provided consumers with a choice of energy retailer but it also led to some new challenges.
EWON received large numbers of complaints about energy marketing, particularly about marketing to people where informed consent was an issue because of factors such as frail age, language, health or intellectual disability. We raised this issue with energy retailers, government, the regulator and key community organisations. We provided information for consumers to assist them in making informed choices in the energy market.
We found energy retailers to be responsive to feedback about poor marketing practices and we will continue to monitor complaints in this area.
Recent New South Wales legislation has opened up water services to competition, but we expect that this may be more limited and slower to develop than the energy market.
The next ten years in a national environment
To look to the future I’d like to return briefly to the past, to the Electricity Association paper in 1996.
“ Others have suggested that we should have a national electricity ombudsman scheme rather than separate State systems. This we believe also has some merit, but less so than the first proposal because the economies of scale would be diluted by the extended geographic spread, and the diversity of the separate State regulatory systems that currently apply to utilities in other States.”
The next ten years will see the national energy market, national regulator and national consumer protection framework well in place. EWON and ANZEWON* members have argued strongly for best practice national consumer protection. While the question of a national energy ombudsman will certainly be debated during the next decade, there will need to be discussion about the appropriate model for a national scheme. The premise for any model should be meeting the needs of utility consumers for access to timely, fair and effective dispute resolution regardless of where they live.
Acknowledgements
EWON is the product of the many people who have been a part of the service or who have supported our work over the past ten years. On behalf of EWON, I give special thanks to:
- Michael Sinclair, former Executive Director of the Electricity Association of NSW
- Helen Swan, EWON’s first business manager
- Chairs of the EWON Council Gae Pincus, Lionel Bowen, and current Chair Professor Stuart Rees
- Chairs of the Board Val Duncan, Geoff Lilliss and current Chair Terri Benson
- Fiona McLeod, Energy & Water Ombudsman (Victoria)
- other ANZEWON (Australia & New Zealand Energy and Water Ombudsman Network) and ANZOA (Autralian and New Zealand Ombudsman Association) colleagues
- Independent Pricing and Regulatory Tribunal
- Department of Water and Energy; and
- NSW Office of Fair Trading.
Thank you to the EWON Board and Council, who have been very supportive of the scheme through the provision of adequate funding and staffing, and constructive review of our operation.
Thank you to our member providers. While we have had our differences with some utilities, members of the scheme have generally been supportive and worked with EWON to achieve reasonable outcomes for customers.
Thank you to the community workers who have helped promote EWON. You provide an invaluable service for low income and disadvantaged consumers.
Finally, I wish to thank the EWON managers, and present and past staff. EWON’s success is their success. They are a skilled and committed group of people who perform their role with care and grace.
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