• that, by now, retailers should have established and clarified their business processes, to identify and minimise the potential for wrongful disconnections;
• developments towards a National Energy Customer Framework.

We’ve made a submission to the ESC’s review. That submission, together with others we’ve made during 2009, can be found here.

Among other things, we questioned whether retailers do have their processes sorted out to identify and minimise the potential for wrongful disconnection. We noted that most of the WDPs paid by retailers arise from complaints investigated by EWOV. In 2008-09, in 53% of the actual disconnection complaints we investigated, a WDP was found to be payable. We questioned how many payments are made to customers who don’t come to EWOV.

We also pointed out that EWOV’s disconnection cases are increasing at the moment—although Victorian disconnection cases remain low, compared with those in other states.

We are aware that industry has suggested some modifications to the WDP provisions—such as capping payments or excluding disconnections in error. Our submission advised that the average value of a WDP in EWOV disconnection complaints in 2008-09 was $837.93, indicating a little over 3 days off supply. There were 21 complaints where the payment was over $1,000 and 7 complaints where it was more than $5,000. In relation to disconnections in error, we said we could see no reason to exclude these, because the detriment to customers is independent of the cause of the disconnection.

We didn’t see it as EWOV’s role to comment on options for modifying the WDP scheme—but, in relation to the National Energy Customer Framework (NECF), we did say we saw value in some kind of incentive mechanism for retailers to be careful and compliant when they disconnect customers. The current draft of the NECF doesn’t have any such incentive, so another option for Victoria is to retain the WDP as a state-based provision, even when there is national regulation.

What does this mean for you? The Minister is due to receive the ESC's final report by 31 January 2010. A draft report is due out for comment in the week beginning 30 November 2009.  So, if you missed the first round of submissions (which closed on 30 October 2009), there may still be an opportunity to have your say.

Return to the Message from the Ombudsman.

In responding
to this review,
we've questioned
whether it's the
right time to
change the
'wrongful
disconnection
payment'
provisions