Backbill error (C/98/1739)

Case number: C/98/1739
Date of Decision: 13 January 1999
Decision accepted by the customer: Yes

The customer contacted EIOV and stated that he had received a backbill from his electricity company totalling $1,472.75, for which he did not believe he should be liable.

The customer stated that he had contacted his electricity company in September 1996 to query the bill he had just received for his business account as he believed it to be too low. He stated that his electricity company has advised his meter had been checked and was functioning correctly and that the bill should be paid. Following receipt of his next quarterly bill, he again called his electricity company, as he still believed his bill was too low. He stated he had contacted his electricity company twice more and had been advised on all occasions that his bills were correct.

In March 1998, representatives of his electricity company visited his premises and replaced his meter. He subsequently received a backbill totalling $1,472.75 and a letter advising him that the time-switch attached to his meter was faulty and had recorded all usage since June 1996 against the off-peak register. He contacted his electricity company to query this backbill and was asked if he wanted to work out a payment arrangement. He did not believe he was liable for the backbill given that he had called his electricity company several times to query his bills and was informed they were correct.

EIOV opened an investigation and received from the customer's electricity company information relating to the customer's account and his complaint. The electricity company advised that the problem had not been apparent when the customer first contacted the company in September 1996, and that the company had not charged the customer for usage prior to the twelve-month retrospective period for adjustments, this usage totalling $990.95.

The electricity company advised that its accounting systems have the capacity to detect anomalies in meter readings such as that experienced by the customer, but that investigation into the customer's account had not been conducted. Notes on the customer's account indicated that the problem with the time-switch had been identified by the company in December 1997, but that no action had been taken to rectify the problem or notify the customer of the fault until March 1998 when the timeswitch was replaced and the backbill issued.

Following the matter being unable to be resolved via negotiation, the parties sought the binding decision of the Ombudsman to resolve the matter. The Ombudsman considered the provisions of the Electricity Supply and Sale Code, and the Retail Tariff and Metering Code in relation to this complaint.

The Ombudsman noted that the electricity company was entitled under the Electricity Supply and Sale Code to charge the customer for the amount of the undercharge for a period of 12 months prior to his last bill, but that the customer had provided the electricity company with the opportunity to rectify the problem. The Ombudsman also noted that the customer had relied on the electricity company to rectify the problem in order to prevent a situation arising whereby he would receive a large backbill. The customer had carried on his affairs having accepted the statement which implied he would not have to make any repayment, and the assurance that there was no error.

The Ombudsman found that, in a legal sense, the supplier was stopped from denying that the recorded charges were correct. The Ombudsman also found that it would be inequitable to allow the electricity company to fail to rectify the problem at an early stage, having put them on notice, and then recover, as it would place an undue burden on the customer who had at all times acted with propriety.

The Ombudsman determined that a fair and reasonable outcome was that the electricity company reduce the amount of the $1,427.45 backbill to nil.