Welcome to the first EWOV News of 2023. As I write this message, the new year invites reflection and hope, alongside the uncertainty many are experiencing, as global and local factors impact the affordability of everyday essentials like gas and electricity.
In 2020, during the early months of the pandemic, we began examining our data more closely, and regularly sharing our data insights through our reports, and in influencing positive business practices, and improvements to policy and regulatory frameworks. These briefs share insights from our casework on the issues facing Victorian energy and water users. Our insights inform positive changes that help ensure fair outcomes for businesses and consumers in a rapidly changing environment. We’ve continued to share EWOV’s unique consumer and data insights. Here are some of the high-level insights that offer a picture of the issues we saw in 2022, a year that saw significant affordability and transfer-related complaints due to energy price increases.
- High billing complaints were the most prominent sub-issue of 2022, especially through June–November.
- High billing complaints peaked in August (we received 91 cases in the span of a single fortnight compared to 60 cases during a fortnight in July) as a result of energy price increases around this time.
- The impact of price-related increases and the pressures of the pandemic were felt by retailers and reflected in our data – between June–August, customer service complaints related to poor service or a failure on the retailer’s part to respond were present in the top 5 EWOV complaints.
- Between mid and late July, we received 161 price increase-related complaints, an increase of 111% compared to the previous fortnight.
- Toward the end of the year, connection delays were consistently present in the top 5 issues for October and November, accumulating 38 and 44 complaints respectively.
We continue to try to let consumers know of their rights and the availability of EWOV if they have an enquiry or complaint about their energy and water providers. We’re a free and independent dispute resolution service and we have an important role to play, especially at a time of difficulty and uncertainty in Victoria.
We hope you enjoy this edition of EWOV News. If you have any feedback, please let us know.
Energy and Water Ombudsman (Victoria)
In November, we shared data insights with the Department of Environment, Land, Water and Planning (now Department of Energy, Environment and Climate Action) as part of a significant consultation on the transitioning energy market, with a focus on Distributed Energy Resources (DER) or consumer energy resources (CER). DER and CER are the systems located ‘behind the meter’ such as rooftop solar, battery storage and home energy management technology, and are a rapidly expanding part of our renewable energy future and allow consumers greater control over their type and levels of energy usage.
The Department’s consultation paper, Protecting consumers of Distributed Energy Resources, sought views from stakeholders about how consumers should be supported and protected during the energy transition in Victoria, including levels of access to independent, free, fair dispute resolution to help ensure consumers can have trust and confidence in the evolving energy market.
Our submission highlighted issues such as the complexity of DER, a need for clear and fair redress pathways when something goes wrong, the importance of trust and confidence in the sector and the key role that EWOV can have in supporting positive outcomes for consumers and the market.
Read our submission on our website.
In late 2022, we reviewed themes from our systemic issue investigations. One of the themes we discovered is customers having difficulty accessing the Utility Relief Grant Scheme (URGS), an initiative designed to aid affordability for Victorian energy consumers.
We draw on insights from our casework and other sources to identify potential systemic issues in energy and water in Victoria. We then investigate these issues to help improve outcomes for consumers and the market, and trust and confidence in the energy and water sectors. We share insights with regulators and policy makers to inform changes that could further improve consumer and market outcomes.
We have seen some URGS-eligible consumers not being made aware of their entitlements, particularly when attempting to have supply restored after disconnection for non-payment, or energy retailers not assisting consumers in completing and submitting application forms over the phone, which has been a requirement since 1 October 2020. We’re informing energy companies about this to help ensure eligible consumers get access to the scheme when they’re having trouble paying their bills.
There’s also emerging research that suggests that eligible consumers are missing out on concessions. A report from the Consumer Policy Research Centre states that 7% of eligible Victorians missed out on concessions on their electricity bill. The numbers are higher for gas and water, with 12% of eligible Victorians missing out on gas concessions and 22% missing out on water concessions. It’s important that consumers are made aware of their eligibility and make sure that concessions are applied to their bills, particularly as consumers juggle cost of living pressures.
We’re aware of some retailers updating their customer management IT systems. These systems are responsible for recording and updating customer information, interactions and usage, and issuing bills. As a result of the update, consumers may see delays in bills and backbills.
Backbills are sometimes called ‘catch-up bills’ and can happen when previous bills have been estimated, there was an error in a previous bill or where there is a delay in the usual billing schedule. It’s important for consumers to be made aware of the rules around backbills, especially during a time of system updates.
Water companies can send a backbill for up to 12 months. Consumers must be given an equal amount of time to pay the bill.
Electricity and gas companies can send a backbill for up to four months, unless the consumer is at fault. Consumers must be given an equal amount of time to pay the bill and sometimes are given more, up to a maximum of 12 months.
We highlight and raise awareness about the rights and responsibilities of businesses and consumers in our complaints handling and resolution, and market insights and improvement work.
Embedded networks are private electricity networks that supply electricity to homes or businesses within one area, such as an apartment building, shopping centre, caravan park or retirement village. Usually, the operator of the embedded network buys electricity in bulk and then sells it to customers inside the embedded network.
From 1 January 2023, the Victorian Government’s changes to the General Exemption Order, which covers electricity embedded network operators in Victoria, came into effect. These changes followed a Victorian Government election commitment in 2018 to limit embedded networks in new residential apartment buildings, with exemptions for sites that use renewable energy microgrids. An expert panel was set up to review embedded networks and proposed reforms.
The first phase of reforms, which came into effect on 1 January 2023, requires any new residential embedded networks to meet a renewable energy condition in order to operate.
The second phase of reforms, scheduled for 2023 and 2024, propose to create a licensing requirement for embedded networks, enhance consumer protections and provide access to competitive retail offers.
The changes to embedded networks follow other reforms, such as expanding access to EWOV for embedded network consumers and setting the Victorian Default Offer (VDO) as the maximum price.
You can read an overview of the changes, as well as the Victorian Government’s statement, on the Engage Victoria website.
The Essential Services Commission (ESC) has begun consultation on the Victorian Default Offer (VDO) prices that will apply from 1 July 2023 to 30 June 2024. The VDO is a default offer, providing an electricity option for customers who are unwilling or unable to engage in the market.
The ESC is seeking input from stakeholders on the VDO and its approach to estimating operating and other costs of providers. It is also seeking feedback on how costs associated with the Australian Energy Market Operator’s June 2022 intervention in the wholesale market should affect the VDO.
Submissions close on 30 January. Visit the Essential Services Commission website for more information.
In November, we released the latest edition of Reflect, our regular quarterly report featuring case data and insights. We highlighted the spike in billing cases in the July to September 2022 quarter as well as the increase in transfer cases, in the context of energy price rises.