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Reflect

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The Ombudsman's view

Catherine Wolthuizen

"Despite this increase in case volumes, our resolution times have decreased over the quarter"

The start of the financial year was marked by a surge in complaints to the scheme. Over the quarter, we observed an increase in overall complaint volumes compared with the April–June quarter. We also saw a sharp uptick in the number of cases that progressed to investigation (722), almost twice as many as the same quarter last year. But despite this increase in case volumes, our new case management model has supported a decrease in resolution times over the same period. Though the new model is stil in the implementation phase, we are encouraged to see the benefits already flowing through to users of the scheme.

We typically see higher case volumes in the July to September quarter, as winter heating loads flow through to consumer bills, but this year the increase was exceptionally strong. We received 6,213 cases this quarter, up 54% compared with April–June. Our caseload was also 11% higher this quarter compared with the same quarter last year, likely driven by higher wholesale electricity prices, rising prices for consumers and wider affordability challenges.

High bills continue to drive our caseload — we saw more than three times as many high bill cases this quarter (1,417) compared with the April–June quarter (530), and a 42% increase compared with the same quarter last year (999). Though gas bills continue to make up the majority of our high bill cases (57%) this quarter, high electricity bills have increased as a proportion of high bill cases (36%) this quarter compared with the same quarter last year (24%).

We also observed a disproportionate increase in caseload from some providers. It appears that these increases stem from system changes and operational decisions, resulting in billing impacts and issues for consumers. We are working closely with these providers to help them address these issues and to speed up resolution of complaints which escalate to us.

In early September, Victorians experienced severe storms in which more than 180,000 households lost power for an extended period. However, we received far fewer complaints in the aftermath of this event compared with the February storm event earlier this year. While fewer consumers lost supply in September, lower complaint volumes may also reflect efforts by distribution businesses to improve their outage communication to consumers.

In this context, we welcomed the Final Report of the Outage Review released in September, in which the independent panel supported several of our recommendations. Key among these was a recommendation to introduce an overarching principles-based obligation to strengthen requirements for how providers engage with consumers after storm and other natural disaster events.

We continue to engage with the Essential Services Commission as their review of the Energy Retail Code of Practice continues, sharing insights about key changes needed to ensure consumers can access their entitlements. EWOV also made a submission to the Department of Energy, Environment and Climate Action's (DEECA) strategic review of the Victorian Energy Upgrades (VEU) program. This submission highlighted the critical importance of robust and fit-for-purpose consumer protection frameworks — including clear and accessible dispute resolution pathways — so that consumers can have trust and confidence and are protected from harm as they engage with the transition to renewables.

Read on for more detail in the latest edition of Reflect. As always, you can find more data relating to our casework in the Data Hub.

The big picture

  • We received 6,213 cases in the July–September quarter 2024, a 54% increase from 4,024 cases received in the previous quarter. Cases were up 11% compared with last year, when we received 5,603 cases in the July–September quarter 2023. This was previously the highest quarterly caseload we received in two years.
  • We received 3,298 electricity cases this quarter, up 42% from the previous quarter (2,322) and 14% compared to the same quarter last year.
  • Gas cases were also up 88% from 1,261 received in the April–June quarter to 2,372 in the current quarter. This was a 3% increase from 2,313 cases received the same quarter last year, when we observed a sharp increase in the volume of gas cases as a proportion of all cases.
  • Billing cases continue to be the primary driver of our caseload, with 3,727 billing cases received this quarter. This reflected a 90% increase compared to the previous quarter (1,963) and an 16% increase compared to the same quarter last year (3,212).
  • High bill complaints are the key billing issue, comprising 1,417 of all billing cases. This was three times as many high bill cases received last quarter (530) and up 42% compared to the same quarter last year (999).
  • We received 712 credit cases this quarter, up 20% from 592 cases received last quarter and up 17% from 609 received the same quarter last year.
  • We received 260 supply cases this quarter, down slightly from 284 cases received last quarter, more than double the 122 supply cases we received in the same quarter last year. A higher volume of supply cases throughout 2024 has been driven by complaints related to storm events and unplanned outages.

Cases can sometimes be amended, reopened and reallocated — for these reasons, there may be discrepancies between the previous quarter and the information presented in past editions of Reflect.

Quarterly trend over time

Issues watch

High bills and access to the best offer

This quarter, complaints about best offer appeared among our top five case categories, where consumers reported difficulties in seeking to switch from their current plan to the best offer. We received 161 cases about best offer this quarter, four times as many as the April–June 2024 quarter (43), and twice as many as the July–September quarter last year (78). These cases primarily related to electricity bills (118) rather than gas bills (43), likely highlighting the impact of higher wholesale prices on consumer bills.

We consider these kind of complaints can broadly be categorised by two underlying drivers. Firstly, we observe there is a lack of awareness of best offer amongst consumers. This may be because they do not see the best offer notice on their bill, or see it and not register genuine benefits of switching to a better offer. Low consumer awareness of the best offer is highlighted in Jeff’s story below. This case showed how large conditional discounts can create confusion for consumers, by masking higher underlying prices, price changes, and the benefits of switching to a better offer. The best offer notification provided to Jeff on his bill indicated that he would be $800 better off if he swapped to the retailers’ best offer, but Jeff had not taken this offer up.

Second, those consumers who are aware of the best offer, can report challenges with accessing it when they try to switch, such as not being able to reach their provider or the provider not offering sufficient information about the best offer, leaving consumers to perceive switching as risky, time-consuming or complicated.

We canvassed these issues in our submission to the ESC as part of their review of the Energy Retail Code of Practice (ERCoP). We also continue to engage with the ESC to consider reforms to ensure consumers can access a better offer to save on their energy costs.

Consumer Energy Resources

After several years of declining solar complaints, we have seen an overall increase in the number of solar-related cases we receive, rising 11% this financial year compared with last financial year. In this quarter, we received 312 cases, a 46% increase from 214 cases received in the previous quarter, and similar to 304 cases we received in the same quarter last year.

We also receive cases about issues arising with consumer energy resources (CER) (e.g. home batteries, electric vehicles etc). These cases highlight the difficulties consumers face in engaging with these products, often due to complex tariff arrangements or unclear contract terms. All or part of the case may be outside of EWOV’s jurisdiction.

New CER products and services are not separate to traditional retail services. They are closely integrated into existing energy retail arrangements and/or can have a direct impact on a consumer’s supply and ability to use energy. This is particularly relevant in the context of bi-directional energy flows, where consumers generate energy (via their solar PV system) or feed stored energy (e.g. via home battery) back to the grid. Crucially, existing consumer protections do not necessarily extend to new CER products and services.

We continue to engage with policymakers about the need to ensure consumers can access free, fair and independent external dispute resolution (EDR) services when a consumer encounters a problem with a product or service.

Consumer stories

High bill complaint reflecting high costs

Jeff* complained to us about a high electricity bill of around $400, claiming his usual bills were around $115. Jeff explained he has not purchased any new appliances that would increase the usage. He had contacted his retailer and it advised the bill was correct and payable. His provider had offered a payment plan but Jeff did not want to accept the plan. He had been a customer of the retailer for five years and told us he had never received such a high bill.

During the course of our investigation, we discovered that Jeff had, at times, received bills for $110 or similar amounts, however, these were often during milder months. We conducted a tariff review and found that Jeff had been billed correctly, and concluded the reason for the high bill was that the cost of electricity had increased significantly year-on-year. Although Jeff’s plan included a large 45% pay-on-time discount, the price increases still resulted in significant cost increases on the bill.

Through our conciliation of this case, the retailer applied a $250 customer service gesture and provided him with a revised bill with an extended due date. The retailer also completed a rate comparison and provided two quotes for alternative energy plans for Jeff to consider switching to.


* Names have been changed

Challenges navigating unclear virtual power plant contract arrangements

Zhang* bought a solar PV and battery bundle for $20,600 after government rebates, with finance provided through the retailer. Zhang had also signed up to participate in the retailer’s virtual power plant (VPP) as part of the bundle. Zhang reported their VPP provider was charging the battery from the grid during the day at 23 c/kWh and received a feed-in-tariff of 5.2 c/kWh when the battery was remotely drawn down through the VPP during periods of demand. The VPP provider also paid Zhang a monthly fee of $10 as part of the VPP program.

Zhang complained that the retailer did not state in their VPP contract that the retailer would charge the battery from the grid (i.e. at the consumer’s cost) even when the battery was not required, such as during the middle of the day when his solar panels were generating energy.

After we assisted the consumer to make a complaint, the retailer advised they had explained to Zhang that no more than 500 kWh would be discharged to the grid, and that he was provided $60 additional VPP credits when he signed up for the VPP in May 2024. The retailer confirmed that since Zhang had first made his complaint, he had closed his account and had switched providers.


* Names have been changed

Outreach and engagement

In August, Ombudsman Catherine Wolthuizen participated on two key panels — at an Australian Competition and Consumer Commission (ACCC) and Australian Energy Regulator (AER) Conference. She shared case insights, reflected on key changes needed in the consumer protection framework to ensure consumers get the supports they need to address affordability issues, and the need for clear market stewardship to deliver trust and confidence in the transitioning market. She also spoke at the Society of Consumer Affairs Professionals 34th Annual International Symposium on effective dispute resolution and early identification of systemic issues as key elements in effective risk management and continuous improvement.

In September, our CareConnect team attended the Gippsland “Meet the Services” event, which aimed to bring together a range of frontline services providers and offer an opportunity for community members to learn more about supports available to them. Over 180 community members attended across two days, and we spoke with attendees about energy issues and, in particular, the rising cost of energy bills. Other common issues raised included low consumer awareness of the best offer, with consumers reporting they had not seen the best offer notice on their bills, or if they had, they did not act on it. Consumers in financial difficulty also expressed they were not aware of the Utility Relief Grant (URG). These insights highlight the ongoing challenges for consumers accessing key entitlements to address the affordability challenge.

Submissions

Our latest submissions:

Australian Energy Market Commission - Draft Terms of Reference: Pricing for a Consumer Driven Future (Joint Energy and Water Ombudsman submission)

We called for the AEMC to consider in its review how a lack of fit-for-purpose consumer safeguards may impact on the benefits consumers receive from the packaging of CER services.

Read the submission


Victorian Energy Upgrades Strategic Review

We highlighted the current patchwork of pathways to dispute resolution for consumers experiencing an issue arising from a VEU installation, which is at odds with the policy objectives of the VEU program.

Read the submission


Select Committee on Energy Planning and Regulation in Australia

We suggested the Select Committee could consider how to ensure external dispute resolution services have appropriate jurisdiction to handle disputes arising from new CER products and services as part of a fit-for-purpose consumer protection framework

Read the submission

Glossary

Visit the Data Hub for a full glossary of terms.