EWON Insights Apr-Jun 2021
In our April to June 2021 quarterly report we focus on debt collection, a complaint issue we expect to re-emerge when collection activity recommences later in the 2021-2022 financial year. We also look at disconnections resulting from transfer errors and/or when customers open new accounts.
Our 2019 Independent Review recommended that we expand our systemic issues work to include a focus on specific energy or water sector-wide issues. Our third Spotlight On report brought to light the gap in energy consumer protections experienced by an increasing number of NSW residents. There are currently 49,000 residents who live in apartments with hot water supplied by embedded network operators and retailers who bill based on kiloliters of hot water used.
By comparison, over 250,000 apartment households are billed for the energy used to heat their hot water via their energy retail gas bill. These households are covered by the National Energy Consumer Framework (NECF) and can access rebates and/or concessions. Since the release of this important report, we have hosted two successful workshops with senior staff from the Australian Energy Market Commission, the Australian Energy Regulator (AER), Department of Planning Industry and Environment and the Independent Pricing and Regulatory Tribunal to examine the problem and work towards a solution. I would like to thank those who contributed to analysing the viability of EWON’s proposed solutions and we look forward to achieving the best resolution for consumers in the near future.
The AER’s Statement of Expectations (SoE), introduced in April 2020 to support customers in lockdown or otherwise affected by COVID-19, was due to finish at the end of FY21. Wisely, the AER recognised the COVID crisis is far from over and had a standby approach at hand. Energy consumers in Greater Sydney, Orange and surrounding towns were the first to receive this ongoing support. Greater Sydney consumers may be reliant on the standby SoE for some time, and we will continue to encourage them to engage with retailers and where required, establish affordable payment plans.
Throughout the 2020-2021 financial year, complaints were lower than forecast with the 3,800 complaints received until the April – June quarter bringing the total for the year to 16,068.
In this EWON Insights we focus our attention on debt collection, a complaint issue we expect to re-emerge when collection activity recommences later in the 2021-2022 financial year. We also look at disconnections resulting from transfer errors and/or when customers open new accounts.
Stay well everyone.
Energy & Water Ombudsman NSW
Complaints received in the Apr-Jun 2021 quarter remained steady at 3,800, compared to 3,803 in the last quarter.
Electricity: Total electricity complaints were 2,796, falling 3.0% compared to the previous quarter’s 2,881. The 2,563 electricity retail complaints we received during the period represent a 3.4% decrease on last quarter’s 2,626 complaints. Network complaints fell by 5.9%, with 193 complaints compared to 205 in the previous quarter.
Gas: At 790, overall gas complaints were 13.0% higher compared to 699 complaints received in the previous quarter. The 709 retail complaints received during the quarter represented a 9.6% increase compared with the previous quarter’s 647. The 59 gas network complaints increased by 16 from the last quarter.
Water: We received 183 water complaints this quarter, three less than last quarter.
Graph - complaints opened Apr-Jun 2021 compared to previous quarter
Table 1 provides detailed information about the number of complaints received from April to June 2021 compared to the previous four quarters.
Table 1 – Complaints opened April to June 2021, including the previous four quarters
Case subject Provider type Apr-Jun 2021 Jan-Mar 2021 Oct-Dec 2020 Jul-Sep 2020 Apr-Jun 2020 Electricity Exempt retailer 9 17 10 21 12 Electricity Network 193 205 267 251 259 Electricity Retailer 2,536 2,626 2,875 3,149 2,658 Electricity Not allocated 58 33 32 33 63 Electricity total 2,796 2,881 3,184 3,454 2,992 Gas Exempt retailer 1 0 0 0 0 Gas Network 59 43 30 50 21 Gas Retailer 709 647 680 673 520 Gas Not allocated 21 10 15 16 10 Gas total 790 699 725 739 551 Non-energy/ non-water Not allocated 31 36 26 24 15 Non-energy/ non-water total 31 36 26 24 15 Water Network 56 60 47 44 74 Water Retailer 103 101 80 92 99 Water Not allocated 24 25 30 20 18 Water total 183 186 157 156 191 Grand total 3,800 3,802 4,092 4,373 3,749
Customer complaint issues
Customers identified 7,201 different issues associated with the 3,800 complaints opened this quarter. This was a decrease of 3% on the previous quarter when 7,423 issues were identified, and a decrease of 0.8% on the same quarter last year (7,256).
Most issues decreased in line with the overall reduction in complaints. There was a slight increase in billing error complaints by 8.5% (179 up from 165) and general energy/water complaints by 16.3% (157 up from 135).
Payment difficulties complaints increased by 31.6% (250 up from 190). This may be related to the lockdown that commenced for parts of NSW in June 2021. The Australian Energy Regulator’s (AER) Statement of Expectations ended on 30 June 2021 but, to handle ongoing temporary lockdowns, the AER has a set of Standby Statements which will apply when deemed necessary. The Standby Statements currently apply to the areas of NSW in lockdown. It is expected that the increase in payment difficulties complaints will continue in the current quarter, as the lockdown remains in place in July 2021, with more restrictive rules.
Table 2 – Top 10 issues April to June 2021, including previous four quarters
Primary issue Secondary > Tertiary issue Apr-Jun 2021 Jan-Mar 2021 Oct-Dec 2020 Jul-Sep 2020 Apr-Jun 2020 Billing High > Disputed 1,130 (15.69%) 1,204 (16.2%) 1,600 (20.1%) 1,717 (21.8%) 1,285 (17.7%) Customer service Poor service 644 (8.94%) 698 (9.4%) 733 (9.2%) 634 (8%) 604 (8.3%) Billing Opening / closing accounts 411 (5.71%) 474 (6.4%) 425 (5.4%) 397 (5%) 395 (5.4%) Billing Estimation > Meter access / not read 308 (4.28%) 340 (4.6%) 405 (5.1%) 428 (5.4%) 437 (6%) Customer service Failure to respond 296 (4.11%) 347 (4.7%) 382 (4.8%) 344 (4.4%) 348 (4.8%) Credit Payment difficulties > Current / arrears 250 (3.47%) 190 (2.6%) 193 (2.4%) 207 (2.6%) 190 (2.6%) Customer service Incorrect advice / information 205 (2.85%) 242 (3.3%) 232 (2.9%) 217 (2.8%) 263 (3.6%) Billing Error > Other 179 (2.49%) 165 (2.2%) 106 (1.3%) 139 (1.8%) 96 (1.3%) General Energy / water 157 (2.18%) 135 (1.82%) 150 (1.89%) 180 (2.29%) 139 (1.92%) Billing Backbill 157 (2.18%) 165 (2.2%) 183 (2.3%) 140 (1.8%) 122 (1.7%) Total issues per quarter 7,201 7,423 7,943 7,868 7,256
Note: the total number of issues recorded may be greater than the number of complaints received.
Core issue in a complaint
In July 2020 EWON began a new data collection process which identifies the core issue in a customer’s complaint. In each complaint EWON receives there may be more than one issue but there can be only one core issue.
There is a difference in the number of cases received (3,800) and the number of core issues (3,827). This is because core issues are only assigned when a case is finalised and cases opened in previous quarters can be shut in the current quarter.
Of the 250 complaints where payment difficulties were identified, 107 (42.8%) had this as a core issue. For disputed high bills, 833 complaints out of 1,130 (73.7%) had this as the core issue.
Most core issues declined or remained steady. Complaints with payment difficulties as the core issue increased by 24.4% (107 up from 86) compared to the previous quarter. Complaints with general energy/water as the core issue increased by 18.0% (157 up from 133).
Despite three different customer service issues being in the top ten issues this quarter, there are no customer service issues in the top ten core issues. While dissatisfaction with providers’ customer service influences most complaints raised with EWON, it is rarely the main reason a customer approaches EWON.
Table 3 - Top 10 core issues
Primary issue Secondary > tertiary issue Apr-Jun 2021 % total Jan-Mar 2021 % total Oct-Dec 2020 % total Billing High > disputed 833 21.77% 897 23.51% 1,215 29.6% Billing Opening / closing accounts 212 5.54% 243 6.37% 204 4.97% General Energy / water 157 4.1% 133 3.49% 145 3.53% Billing Estimation > meter access / not read 116 3.03% 141 3.7% 163 3.97% Credit Payment difficulties > current / arrears 107 2.8% 86 2.25% 74 1.8% Billing Refund or credit > delay / error / form 91 2.38% 91 2.39% 100 2.44% Billing Error > other 90 2.35% 104 2.73% 59 1.44% Billing Error > wrong meter 87 2.27% 86 2.25% 69 1.68% Credit Collection > credit ratings 85 2.22% 100 2.62% 114 2.78% Billing Error > payment / deduction 81 2.12% 81 2.12% 86 2.1% Total 3,827 3,815 4,105
Energy complaints and case studies
3,586 electricity and gass complaints were received in April-Jun 2021. The breakdown of energy complaints by complaint category is shown in the graph and Table 4 below.
Table 4 – Energy complaint breakdown April - June 2021
Complaint type Number of complaints % total energy complaints General enquiry 11 0.3% Complaint enquiry 1,619 45.1% Refer to higher level 1,204 33.6% Investigated 752 21% Total 3,586 100%
The AER’s Statement of Expectations ensured debt referral to credit collection agencies was deferred during COVID-19, provided customers contacted their retailer or set up affordable payment plans.
However, EWON saw cases involving financial vulnerability increase during 2020 and 2021, including a wide range of complaints regarding debt being referred to credit collection agencies.
Retailer won’t agree to affordable repayments
A customer was contacted by her retailer regarding a debt of $244 on a closed electricity account. She was aware of the debt and was paying $10 per fortnight since the account was closed. The retailer told her that she needed to pay the $244 as a lump sum or the debt would be referred for credit collection. She said she was unable to make this payment due to other financial commitments and offered to pay $25 upfront and then $50 per fortnight. The retailer declined and did not provide an explanation why they had requested a lump sum payment. She asked the retailer to send her a copy of her account statement but it was never received.
EWON contacted the retailer which offered to waive the balance of $244. The customer was happy with the outcome.
Retailer unable to provide proof of debt
A customer was contacted by a collection agency about a $687 debt for a property he had moved out of in September 2019. He said the amount owing did not reflect his normal usage and the retailer had not closed the account when requested. He was told that the debt had been sold and the retailer could no longer discuss the account with him. He requested a copy of the final bill, but it was never sent to him.
We referred the customer to the retailer at a higher level, however, the customer returned to EWON after the retailer failed to provide a copy of the bill as it was too old. They also offered the customer an $11 credit, the amount they considered the account was overcharged. He offered to pay the retailer 30% of the debt, but this was declined. He wanted the retailer to provide proof of the debt, including information about the date that the account was closed.
The customer explained to EWON that he had recently experienced financial vulnerabilities, including periods of homelessness. He said he had a limited capacity to pay due to ongoing health issues, however he did want to pay something towards the debt. He had also seen a financial counsellor with the view to being placed on the National Hardship Register.
When EWON began an investigation, the retailer recalled the debt from the collection’s agency, however advised that it considered the account balance to be correct due to an accumulation of arrears and the customer only ever making one payment towards the account. In recognition of the customer’s vulnerable situation, the retailer agreed to the customer’s proposed resolution to pay 30% of the account balance ($206) and waived the remaining $481 to resolve the complaint.
Overseas customer unable to close energy account
A customer had been overseas between May 2020 and April 2021 and was unable to return to Australia due to COVID-19 restrictions. While overseas, he was unable to access his bank account to pay his bills as he was living in a country subject to financial sanctions. He contacted the retailer to close the account and requested a payment extension for when he returned to Australia. The retailer told him he needed to call them to request an extension every few weeks, but this was too expensive. When back in Australia, he contacted the retailer to request they waive any fees but was told that the debt had been referred to a collection agency and it could no longer assist him.
When EWON commenced an investigation, the retailer confirmed that the account had been closed and that no late payment fees had been applied to the account. The retailer also confirmed that the debt had not been sold and recalled it from the collection agency.
To resolve the complaint, the retailer applied all missed Pay on Time discounts reducing the account balance from $1,267 to $1,075 and applied a further credit of $175 to the account. This reduced the account balance to $900, and the customer was offered 12 months to pay the remaining debt.
Debt collection activity after advocate unable to close account
An advocate contacted EWON on behalf of a customer who was unable to speak due to ongoing health issues. The customer was vision impaired, had recently undergone surgery relating to his vision and was unable to read. The customer wanted to close his account as he left his property in February 2021 and was now homeless.
At first, the retailer told the advocate that the account could not be closed without the customer’s authorisation, refusing to consider the customer’s circumstances. The retailer eventually agreed to close the account and issued a final bill to the customer for $308. The customer previously had a payment arrangement of $70 per fortnight, however could not afford to keep paying that amount and offered to pay $20 per fortnight. The retailer refused to provide a payment arrangement for the final bill.
The retailer also tried to insist the advocate should take responsibility for the account. She did not think this was appropriate and refused, and. The debt was sent to a collection agency for recovery. The advocate was not satisfied with the customer service she received and contacted EWON for assistance.
EWON contacted the retailer who confirmed that while the advocate was listed as an authorised person on the customer’s account, she was not authorised to make changes to the account such as closing it or set up payment arrangements. The retailer acknowledged that the customer had not been able to contact them to discuss a payment arrangement given his circumstances and offered to recall the debt and waive the balance of $308. The advocate was happy with the outcome.
Transferring or opening account results in disconnection
Disconnections are always stressful for customers, but they can be even more frustrating when the customer has been transferred to another retailer in error, resulting in a disconnection order being issued by a retailer the customer has no relationship with.
Electricity disconnected after billing rights error
A customer had an electricity account with Retailer A, but was disconnected by Retailer B in June 2021. Retailer B told her there had been an error but could not explain further. She contacted EWON for assistance with reconnection and to find out why her electricity had been disconnected by Retailer B, a retailer she didn’t have an account with. We confirmed with Retailer B and the distributor that the reconnection was in progress and supply was reconnected on the same evening.
Our review found that Retailer B had taken over the billing rights for the customer’s address in error in September 2020. An administrative address error when opening an account for a different person meant the customer’s address was taken over by mistake. This was in part because the address for the customer’s electricity meter in Retailer B’s system was not consistent with the address in the national electricity database. Despite realising the error and closing the account opened in error, Retailer B did not return the billing rights to Retailer A. Retailer B then began sending vacant consumer bills, but the customer had not received them because the address was incorrect.
Following EWON’s involvement, Retailer A won back the billing rights in June 2021. Retailer B corrected the address in its system to match the national electricity database, waived the $833 in vacant consumer charges and offered a goodwill credit of $100. The customer accepted this outcome as resolution of the complaint.
Delayed transfer due to faulty meter
A customer opened an electricity account for her new address with Retailer A in November 2020. She received a welcome pack in February 2021, but did not receive any further bills or notices until she received a disconnection warning in May 2021.
Retailer A advised her that it had not send the disconnection warning, as it had not been able to open an electricity account as there was something wrong with her meter box but could not explain in more detail. The customer didn’t know who sent the disconnection warning so was unable to contact the retailer who owned the billing rights.
EWON’s review found that Retailer B held the billing rights for the site. Retailer B had sent vacant consumption notices and arranged disconnection as these had not been responded to. Retailer A had made multiple attempts to transfer the site, but these were rejected by the network due to a faulty meter meaning it was impossible to obtain an actual meter reading.
The customer agreed to establish an account with Retailer B and was reconnected. Retailer B confirmed that she would not be billed for electricity from November 2020 to 2 June 2021 as a goodwill gesture. Retailer B then arranged for the customer’s basic meters to be replaced with a digital meter. Once the meters were replaced, the customer could then decide whether to remain with Retailer B, transfer to Retailer A or transfer to another retailer of her choice.
Gas disconnected after confusion with address and meter
A customer opened a gas account with Retailer A for her new address in May 2020. She received and paid gas bills from Retailer A, but also received letters about the gas from Retailer B addressed ‘To The Occupant’. At one point a field officer attended to disconnect the gas supply but agreed to hold off so she could contact the retailers. She contacted Retailer A about the letters and near disconnection, and Retailer A advised that her account was set up correctly and there should be no issue. The gas supply was then disconnected in March 2021. When she contacted Retailer A, it advised there was confusion with the address. She then contacted EWON as it was unclear what had gone wrong or whether Retailer A had arranged reconnection.
EWON found that Retailer A had set up the customer’s gas account for an incorrect gas meter. Retailer B owned the billing rights for the customer’s correct gas meter and had disconnected for vacant consumption. The customer set up a gas account with Retailer B and the gas was reconnected on 29 March 2021.
Retailer B backdated the start of the customer’s account to October 2020 and advised the customer would not be charged for gas use from May 2020 to October 2020 as a goodwill gesture. The customer decided to stay with Retailer B rather than transferring to Retailer A. Retailer A cancelled the customer’s account and refunded the payments of $247 made to the account for the wrong address. The customer accepted this outcome.
Retailer unable to establish a gas account then disconnects gas
A customer opened a gas account for his new address with his preferred retailer in February 2021 but was then disconnected in April 2021. The customer contacted his retailer, which said it had not opened a gas account or initiated a transfer. His retailer said it had now opened an account and requested reconnection. The customer contacted EWON as he was unsure if the reconnection would go ahead and wanted a review of what had gone wrong when he tried to open the account.
EWON confirmed that the retailer already had the billing rights for the customer’s address so there was no need to request a transfer. The retailer had been unable to locate the customer’s address when trying to establish a gas account as it was recorded in the gas network database in a slightly different way to what the customer supplied. Despite this, the retailer had not followed up with the customer to obtain a physical meter number or clarify the address.
EWON confirmed with the retailer and the distributor that the gas reconnection was already raised, and the customer confirmed the gas was reconnected the following day. The retailer backdated the customer’s account to 12 February 2021. Given the issues establishing the account and the customer being without gas overnight, the retailer waived $355 for the period 12 February 2021 to 2 March 2021 and applied a goodwill credit of $250. The customer was happy with this outcome.
Water complaints and case studies
183 water complaints were received in Apr-Jun 2021.The highest number of complaints were complaint enquiries, as seen in the graph and table below.
Table 5 — Water complaint breakdown
Complaint type Number of complaints Total % General enquiry 2 1.15 Complaint enquiry 117 63.9% Refer to higher level 46 25.1% Investigated 18 9.8% Total 183 100%
Disputed high bills were the biggest issue for water customers who contacted EWON. Other complaints relate to general enquiries and poor customer service, as seen in table 6 below.
Table 6 —Water issues – primary and secondary Apr-Jun 2021 compared with previous four quarters
Primary, secondary and tertiary issue Apr-Jun 2021 Jan-Mar 2021 Oct-Dec 2020 Jul-Sep 2020 Apr-Jun 2020 Billing > high > disputed 41 34 27 34 40 General > energy / water 27 26 37 32 30 Customer service > poor service 25 21 17 13 25 Customer service > failure to respond 18 26 18 20 26 Supply > sewerage overflow / blockage 13 10 9 8 6
Additional services offered by water providers
Some water providers offer additional programs for residential, strata and commercial properties to assist with water savings. The programs enable customers to book a plumber through the retailer to check fixtures and fittings within the building, recommend and complete any required repair work, and suggest water efficient devices. Any fees are applied to the customer’s bill and can be paid in instalments. However, the service can be limited because of the range of materials used by the retailer, which can inconvenience the customer.
Retailer’s plumber installs unsuitable tap
A customer had an appointment through the retailer’s plumbing assistance program to fix a leaking tap at her house. She was told by the plumber that the leak could not be fixed because the tap needed replacing. She authorised the plumber to replace the tap, however the replacement tap was not suitable for the size of the kitchen sink. She was charged $253 for the appointment and repairs. She lodged a complaint with the retailer and received confirmation that it had been submitted, but when she followed up, was advised that her complaint was not received. She then asked for her complaint to be escalated but this was declined.
We referred the matter to the retailer at a higher level but the customer returned to EWON as she was not satisfied with the resolution offered. The retailer had offered to refund the original cost of $253 and remove the tap free of charge, however she would need to engage her own plumber to install the correct size tap and pay for this herself. The retailer told the customer that it only installs one type and size of tap and could not install another type of tap. She offered to supply her own tap, which she had already sourced and proposed that the retailer should install this for her at the time of removing the old tap but this was declined. She also asked for a customer service gesture of $200 for the inconvenience caused by the situation.
EWON contacted the retailer which said the customer had signed paperwork which advised the total cost of the original work. The retailer offered to refund the original charge of $253, to be applied to the customer’s next water bill and agreed to send a plumber, at no cost to the customer to remove and install the tap the customer had sourced, if the tap was compatible. The retailer also offered to apply a credit of $100 to address the customer service issues that she had raised. The customer was satisfied with this outcome.
Credit collection by water providers
A customer received a notice from a government collection agency advising he owed $278. He said he had closed his account, paid all bills about two years prior, and had sent an application to surrender his water licence. He tried to contact the collections agency and the water provider but could not get through. He said he filled out another application to surrender his water licence and sent this to the provider.
The matter was referred to the provider at a higher level for resolution however the customer did not receive any contact within five business days. He returned to EWON in May 2021 and said he was worried because the notice he had received from the government collections agency said his bank account would be accessed to recover the debt in June 2021.
EWON contacted the provider which said the full payment had been received, along with the original request to surrender his water licence. The retailer said the request had not been processed correctly, and a new bill had been issued in error. The retailer completed the request to surrender the water licence from 30 June 2020 and told the government collections agency that there was nothing owing on the account.
The customer was grateful for EWON’s assistance in quickly resolving an issue he had spent a lot of time trying to resolve himself.
Embedded network complaints and case studies
In the Apr-Jun 2021 quarter EWON opened 121 complaints from embedded network customers. These customers were complaining about a range of energy service providers:
- authorised energy retailers: 98
- authorised gas retailers: 11
- exempt electricity sellers: 9
- licenced electricity networks: 2
- water (not allocated): 1
EWON closed 127 complaints from customers whose electricity or gas (including hot water) is supplied through an embedded network.
Table 7 -Top core issues for embedded network complaints closed this quarter
Core complaint issues Cases Billing > high > disputed 43 Billing > delay 12 Billing > tariff > rate 8 Billing > backbill 8 Billing > fees and charges > service availability 5 Billing > error > payment / deduction 5 Billing > opening / closing account 4 Billing > high > common hot water system 3 Billing > rebate / concession > information 3 Digital meter exchange > terms and conditions > fees and charges 3
Table 8 - Top issues for embedded network complaints closed this quarter
All complaint issues Cases Billing > high > disputed 50 Customer service > poor service 21 Billing > opening / closing account 17 Billing > delay 16 Billing > tariff > rate 13 Customer service > failure to respond 12 Billing > backbill 12 Customer service > failure to consult / inform 11 Customer service > incorrect advice / information 6 Billing > fees and charges > service availability 6
Embedded network case studies
No access to retail competition
The National Energy Customer Framework (NECF) is designed around the expectation that retail competition will drive the benefits energy customers receive and help maintain consumer satisfaction and confidence. Despite this, access to retail competition remains impractical for the growing number of embedded network customers nationally.
Over the last decade, EWON has rarely had contact from embedded network customers who have successfully opened an on-market energy account with the retailer of their choice. However, it appears that some retailers are now making energy-only offers available to embedded network customers. This quarter, EWON received complaints from two different customers, located in different embedded networks, who were following the process to take up an on-market energy contract.
These two case studies demonstrate the difficulties customers have completing this process, and the added complexities they face when managing two sets of energy charges – the pass-through network charges from the embedded network operator (or billing agent) and the energy-only charges from their energy retailer. In the first case study, this added complexity was enough to discourage the customer from completing the process to access retail competition.
Additional charges stop customer from leaving embedded network
A customer wanted to leave his embedded network and was considering an energy-only offer from an authorised energy retailer. The embedded network operator told him that he would still receive a bill for the network charges that are passed through from the licenced network provider supplying electricity to the parent connection point. The embedded network operator provided the customer with a breakdown of pass-through network charges based on his current usage which totalled $272 for the quarter. The customer was advised that these charges included both fixed elements and variable elements that were based on usage. He was not aware the network charges would be so high or structured in this way.
EWON reviewed the pass-through network charges outlined by the embedded network operator and advised the charges were in line with the network charges set by the licenced network provider supplying the parent connection point. We also noted that this was compliant with the AER exempt network guideline.
The customer said the billing arrangements were not disclosed to him when moving into the building. He noted that the combined energy charges from the new retailer and the pass-through network charges from the embedded network operator were prohibitive and the current process does not make it viable to seek an alternative energy offer. Because of this, he decided he would not leave the embedded network.
Embedded network customer with an on-market energy account seeks clarification over bills
An embedded network customer initially opened an account with the embedded network’s billing agent which was also an authorised energy retailer. In 2020, the customer decided he would seek an energy offer from another authorised energy retailer. The customer found an energy retailer with an offer that was available to embedded network customers and which was also willing to install a digital meter at the premises.
The customer contacted EWON and advised his preferred retailer had been attempting to work with the billing agent regarding the pass-through network charges for seven months without success. The customer also complained that he was still receiving energy bills from the billing agent. He said it was unclear what ongoing payments he would need to make to the embedded network operator. He also felt the embedded network billing agent did not follow the correct process for allowing him to leave the embedded network, and the staff he spoke to did not understand what process to follow.
The customer provided EWON with a copy of the bills from his new on-market retailer and the embedded network billing agent. He was confused about why he was receiving bills from two different providers when both bills contained a usage and fixed charge. EWON contacted the billing agent to obtain further information about the network charges.
We explained that the charges he received from the billing agent were the pass-through charges from the licenced network provider supplying electricity to the parent connection point for the embedded network. The pass-through network charges were calculated using the network tariff set by the licenced distributor which included a fixed charge and charges based on the customer’s electricity usage. The customer was satisfied with EWON’s explanation of the charges from the embedded network billing agent.
The sale of hot water in embedded networks should be regulated as an essential service in NSW
EWON’s recent report Spotlight On: Hot water embedded networks shone a light on the importance of hot water as an essential service, regulation in NSW, the need for residents to be covered by energy specific consumer protections, and why residents living in hot water embedded networks across Australia need access to energy and water Ombudsman schemes now and in the future.
Vulnerable customer receives high and confusing gas bill
This case study focuses on a vulnerable energy consumer living in an embedded network. The customer’s gas account was separated into:
- hot water usage and supply charges – making up 80% of the customer’s gas bills for a 12-month period.
- a fixed daily charge for supplying a gas cooktop service (unmetered gas supply) – making up 20% of the customer’s gas bill for the same period.
The National Energy Retail Law (NERL) defines energy as: ‘electricity or gas or both’. This definition excludes hot water services from the regulatory framework for retail energy services. As this customer’s bill was separated into charges for hot water and unmetered gas, 80% of the customer’s gas bill was not covered by energy specific consumer protections, and the customer was not eligible for the NSW Government Gas Rebate or the Energy Accounts Payment Assistance Scheme. The customer could not rely on the following basic consumer protections that apply to retail gas accounts for other households, including:
- the right to request a review of a disputed bill
- rebates and concessions
- internal dispute resolution procedures
- minimum contractual standards
- protections for vulnerable customers (including payment plans and hardship programs)
- minimum requirements for billing, tariff and payment (including limits on backbilling)
- protections against disconnection.
The customer, a 91-year-old man who suffered health issues and lived alone, was a community housing tenant and lived in a building established as an embedded network. He told EWON he moved into the building 12 months ago and had just received a $1,193 gas bill covering 12 months of gas and hot water usage. The customer thought the gas bill was high and did not accurately reflect his usage. He also had trouble understanding the bill because of his poor vision.
The customer told EWON he could not afford to pay the bill and was worried if he did not pay by the due date, he may be disconnected. His sole income was from Centrelink and he had been showering in cold water for two months to try and lower his hot water costs. The customer had called his community housing provider and was told his gas usage should only be about $20 a month. He had contacted the billing agent for the embedded network to dispute the bills but he had not received a response.
EWON contacted the billing agent for the embedded network. The billing agent was also an authorised energy retailer and initially said the customer had been billed on a higher-than-average estimated invoice and a technician would be dispatched to check the hot water meter. The billing agent later said the previous 12 months of charges were based on six months of actual meter readings and six months of estimated meter readings. We reviewed the customer’s gas bills and noted they were separated into charges for hot water usage, a fixed charge for hot water supply and a fixed charge for the supply of a gas cooktop service.
The retailer offered to resolve the complaint by waiving all the usage charges of $503 on the estimated bill for the period covering two quarters. The retailer’s offer left the customer to pay only the fixed charges of $207 for the same period.
The customer accepted the retailer’s offer and requested a payment plan of $40 a fortnight for the $490 balance owing on the account. We asked the retailer to contact the customer directly to discuss his affordability issues and negotiate an affordable payment plan to be established via Centrepay. EWON also ensured that rebates were being applied to the customer’s electricity account and provided the customer with advice and referrals for the available government assistance programs.
Behind the meter case studies
Contracts for behind the meter products involving solar and batteries can be complicated, particularly if the benefit to the customer is linked to the wholesale price of electricity. Customer confusion is not helped by conflicting advice from retailers as to the conditions of their contract.
Solar battery installation offers minimal benefit
A customer with solar panels installed for over fifteen years spent $10,000 to have a solar battery installed in April 2020. His electricity bills did not reduce much after he installed the battery, so he raised concerns with his retailer that the bills might be incorrect. His retailer told him it would look into the issue, but customer service representatives were inconsistent with contact and would often not return his calls.
EWON’s review found that under the customer’s contract with the retailer, the battery would provide the most financial benefit during periods of high demand. We explained that excess electricity generated from the solar panels not used in the home would fill the battery. When the battery was full, the remaining generated electricity was fed into the grid. The customer received a guaranteed feed-in tariff of 6 cents per kWh for energy fed back into the grid regardless of the market demand, even where the spot price dropped below the minimum. In periods of high demand when the spot price rose above the minimum, the customer would be eligible for additional credits for the energy fed back into the grid. The reason the customer had not yet received additional benefits was that the market conditions defined by the contract had not yet been met since the battery was installed.
The retailer provided information about where the customer could monitor the spot price online. The customer was satisfied with this explanation as resolution of the complaint.
Customer received conflicting information about solar plan
A customer installed a 10kW solar unit with 33 solar panels and an 8.2 kW inverter at the end of 2020. He signed up for a 12-month solar plan with his preferred retailer which included a feed-in tariff of 21 cents per kWh. After several months, he received a letter from his retailer advising that he was not eligible for the solar plan as his system was over 10kW, and his feed-in tariff would be reduced to 7 cents per kWh. He contacted his retailer to query this but was given confusing and conflicting information about his eligibility for the plan. At one stage the retailer said he could remain on the plan if he provided proof his system was not over 10kW.
EWON reviewed the terms and conditions of the solar plan and confirmed that customers with solar systems over 10kW were not eligible for the plan. The retailer acknowledged that it had provided conflicting information to the customer about his eligibility and whether he needed to provide proof of the solar system size. The retailer said that the customer’s solar system was likely larger than 10kW but exempted the customer from needing to demonstrate the solar system size. To resolve the complaint, it confirmed he could remain on the plan for the agreed 12-month period and also offered a goodwill credit of $100 for the conflicting information. The customer accepted this outcome.