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F/2007/273
A couple of months after moving into her new property, Ms T entered into a dual fuel contract. Her payments for electricity and gas combined were set at $130 a month. After the six-month review required by the Energy Retail Code, these payments were reduced to $125 a month — because, according to the energy retailer, Ms T’s account was in credit. However, after the 12-month review, Ms T received a letter saying she owed $1,600 and would now need to pay $270 a month.
Ms T maintained the reviews hadn’t been undertaken properly. She was seeking a waiver of some of the debt, on the basis that it was the retailer’s fault this level of debt had been allowed to build up. Ms T also said she couldn’t afford $270 a month. She did concede she’d received a statement a couple of months earlier — but said she hadn’t understood it and was, at the time, distracted as she was about to have a baby.
After EWOV’s investigation, the retailer waived $769.87 of the arrears which had built up on Ms T’s accounts. New monthly payment amounts of $108 for gas and $126 for electricity were negotiated — enough to cover her usage and to repay the
remaining arrears over a year. The retailer also apologised for the inconvenience Ms T had experienced.
‘Bill smoothing’ is a common pricing strategy where a customer’s monthly payments are equalised over the year. It’s important that energy retailers’ six-month reviews of bill smoothing arrangements are accurate — particularly where the retailer hasn’t had a usage history for the customer as a guide to setting the ‘bill smoothing’ amount. Customers should also check their billing statements, to ensure the monthly payments they’re making are covering their actual usage.
Return to Dual fuel case studies
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