Gas supply upgrade and property damage (GD/99/4)

Case number: GD/99/4
Date of Decision: 30 November 2000
Decision accepted by the customer: Yes

A customer was seeking compensation for damage allegedly caused by his gas distributor. He wanted compensation for extra budgetary expenses of $2,592.00 as a result of the loss of his gas cooking facilities, $34.25 for the cost of restoring the nature strip to its original condition and $560.00 in plumber's costs, a total of $3,186.25.

This case demonstrated the difficulties of resolving gas disputes as gas distributors are not required to be a member of an external dispute resolution scheme. Because there was no formal agreement between the gas retailer and the gas distributor about such dispute situations, the customer was off supply for a total of 54 days. EIOV has brought this matter to the attention of the Office of the Regulator-General, and the Government has now moved to require gas distributors to be a member of an independent dispute resolution scheme.

The customer received a notice of planned works from the gas distributor because of increasing demand for gas in his area. It was to involve renewal of the gas distributor's pipe on his property, relocation of his meter, inspection of his existing piping for leaks and on completion, restoration of any disturbance to the nature strip.

It was confirmed that a plumber working for the gas distributor had disconnected the customer's meter and carried out pressure tests. When the tests had failed, a new fitting line was installed, tested and found it was gas tight. The customer was told he had a leak on his side and that he would have to have it fixed before the gas could be put back on. The customer told EIOV there had not been any leaks before the work was undertaken.

EIOV sought the opinion of an independent technical adviser, who reported that the gas distributor's plumber did not include soap and water testing of the customer's fitting line before the work started. Therefore, existing leaks were not detected and it now wasn't possible to determine what caused the gas leak. Although the pipework was showing signs of rust, it generally appeared to be mechanically sound.

At EIOV's request and so that the customer's gas supply could be restored, a contractor engaged by the customer's gas retailer undertook pipe repairs at the customer's property. However, further testing showed that another two sections of the customer's existing pipeline leaked. The customer was told to have a private plumber fix the leaks, which the customer did at a cost of $560.00 and his gas supply was reconnected.

A representative of the Office of Gas Safety (OGS) watched while the gas retailer's contractor attempted repairs. He said the customer's existing gas pipes were generally in poor condition and in need of repair. However, had the gas distributor arranged soundness testing and assessed the adjacent pipework condition prior to the original work, the dispute should have been avoided.

This case raised a number of other issues. The Ombudsman concluded that the gas distributor had made a mistake in not including soundness testing in its routine procedure for meter relocation. She thought the customer reasonably relied on the gas distributor's expertise and that to have no gas for almost eight weeks after routine works was something the gas distributor could have rectified.

As the gas distributor was not an EIOV member, the Ombudsman was unable to direct it to contribute to the customer's expenses. Instead, as the gas retailer was an EIOV member, the Ombudsman directed that it contribute to the customer's expenses by paying him a total of $997.13 (50% of his $560 in plumber's costs, 50% of the $34.25 for nature strip restoration costs plus a $700 customer service payment for inconvenience and out of pocket expenses). In doing so, the Ombudsman said that because it was the retailer's obligation as an EIOV member to make the customer's supply safe and reconnect while the case was being investigated (in accordance with the usual EIOV protocol) the retailer should have had an agreement with the distributor to this effect.

The Ombudsman also recommended that in future the retailer require the distributor to undertake routine soundness testing before relocating meters for the retailer's customers, as well as advise customers in writing when the testing will be carried out and how disputes about pre-existing leaks may be resolved.