Res Online 21 (November 2017)

Number 21
November 2017

Res Online 21 - providing up-to-date information, statistics and analysis on energy and water complaints.

Overview

The Ombudsman's View

High bills deliver ‘bill shock’

In this issue of Res Online, we discuss the increased number of customers complaining to EWOV about high electricity and/or gas bills. Our feature article reports on our recent handling of high bill complaints, with some short examples. Essentially, it highlights shared responsibilities in this space. Customers need to be more aware of how they use their appliances and take responsibility for managing their consumption and therefore their bills. Retailers need to do more to properly assess ‘high bill’ issues at a customer’s first contact and help address the situation in line with their responsibilities under the Energy Retail Code.

Other case studies in this issue

2017 Annual Report

2016-17 delivered EWOV an 11% fall in energy and water cases. The top customer complaint was energy disconnection/water restriction, followed by high bill, debt collection/credit default listing, provision at an existing connection, and billing error.

We attribute the 11% fall to better complaint handling by energy and water companies.

However, we remain concerned about affordability and the capacity of many customers to stay on supply. EWOV continues to find itself dealing with a high proportion of complex complaints, many of them from customers in vulnerable situations.

There were also some increases, most noticeably in cases about:

  • provision of an energy or water connection (up 23%)
  • how company activities or network assets affect land or property (up 15%)
  • the actual supply of energy or water (up 11%)
  • marketing by electricity and gas retailers to gain new customers (up 8%).

Read the Annual Report:

Issues Watch: More customers complaining about high energy bills

What EWOV’s cases show

Overall: July to September 2017

3,724 customers contacted us with a billing issue this quarter:

  • up 44% from 2,590 customers in the April to June 2017 quarter
  • up 3% from 3,613 customers in the July to September 2016 quarter.

1,250 (34%) of the 3,724 customers complained about one or more high bills:

  • up 120% from 567 customers in the April to June 2017 quarter
  • up 34% from 936 customers in the July to September 2016 quarter.

Electricity: July to September 2017

2,029 electricity customers contacted us with a billing issue this quarter:

  • up 31% from 1,545 customers in the April to June 2017 quarter
  • one more customer than in the July to September 2016 quarter.

585 (29%) of the 2,029 customers complained about one or more high electricity bills:

  • up 116% from 271 customers in the April to June 2017 quarter
  • up 43% from 408 customers in the July to September 2016 quarter.

Gas: July to September 2017

1,368 gas customers contacted us with a billing issue this quarter:

  • up 74% from 786 billing cases in the April to June 2017 quarter
  • up 11% from 1,233 billing cases for the July to September 2016 quarter.

506 (37%) of the 1,368 customers complained about one or more high gas bills:

  • up 212% from 162 cases in the April to June 2017 quarter
  • up 55% from 327 cases in the July to September 2016 quarter.

What we found in our resolution of high bill complaints

  • Customers shocked at the size of the bill, and saying they’d have trouble paying it
  • Customers more concerned about how much they had to pay, not how much energy they’d used
  • Customers with limited understanding of how they were using energy
  • More often than not the bill complained about was correct

Many of the complaints investigated by EWOV this quarter fell into the ‘bill shock’ category. The customer wasn’t expecting a bill of that size and said they didn’t understand how it came about. Commonly, they thought the meter was faulty and wanted a meter test. In most cases, the meter was found to be operating correctly and the bill was based on meter reading data. In many cases, the customer just needed help to manage/time to pay the debt they unexpectedly found themselves with.

Shared responsibilities

Customers

What we were told by customers who lodged a high bill complaint with EWOV over the last quarter is revealing. It’s clear that customer education around responsibilities must be ongoing. We suggest this include reminders that customers should:

  • use bills to track their consumption, as well as what they owe
  • understand and consider how much energy (or water) they’re using
  • take notice of price rises and think about how their bills may be affected
  • ask about any concessions they may be entitled to
  • contact their retailer as soon as they realise they’re going to have difficulty paying.

Customers are able to shop around for a better energy deal. Online tools — such as the State Government’s independent comparison tool, Victorian Energy Compare — compares energy offers to help customers find contracts that suit their household or small business: https://compare.switchon.vic.gov.au/

EWOV’s fact sheets, also published online, are another source of easy to follow information about billing:

Retailers

EWOV’s handling of high bill complaints also raises questions about how well energy retailers are delivering on their responsibility to assist customers who complain about high billing. Retailers have a responsibility to help their customers. Simply maintaining that the meter is operating properly and the bill is correct is not helpful. Frontline staff must be given the tools to assess high bill complaints properly at first contact. They must be able to discuss how the customer is using energy (or water) and explain how that may be driving their bills up.

Under the Energy Retail Code, retailers have responsibilities to:

  • review bills
  • arrange for check meter reads
  • test the meter (at the customer’s cost if the meter or metering data proves not to be faulty or incorrect; customers in Victoria aren’t required to pay for a meter check or test in advance)
  • assist customers under a ‘customer hardship policy’, including to:
    • make sure that staff are aware of the policy and skilled in engaging sensitively with hardship customers
    • monitor payments, including accumulation of debt
    • offer fair and reasonable payment options that accommodate particular customer circumstances
    • provide referral to support agencies
    • explain the availability of field audits of usage and replacement of appliances (as appropriate to individual circumstances).

High bill stories from EWOV’s July to September 2017 case files

Fall in electricity consumption indicates something was turned off

The customer thought her high quarterly electricity bill was due to peak rate billing. Her electricity retailer maintained the bill was correct and the meter was working correctly. EWOV’s Investigation of the unresolved complaint confirmed the billing was correct and based on data taken from the meter at the property she was renting. The meter was tested and found to be operating correctly. We reviewed the customer’s electricity consumption and metering information back to February 2017. This showed her consumption increased from April 2017 and peaked in July 2017. It also showed an overnight load of about 2.4kW until early August 2017. Based on our experience, we concluded that the customer’s April to July consumption pattern was in line with winter consumption patterns. The disappearance of the overnight load in early August indicated to us that something (possibly a heater) had been turned off (perhaps prompted by our Investigation). 2017/15615

Use of air-conditioner during heatwave

The customer had been renting a property in regional Victoria for just over six months. He complained about the size of his electricity bill, saying his appliance usage was essentially a fridge, television, mobile phone charging, kettle, and reverse-cycle ducted heating and cooling. He said he used gas for cooking and hot water. The electricity retailer maintained the bill was correct and the meter was working correctly. Our Investigation of the unresolved complaint confirmed the billing was correct. We identified the customer’s use of the air-conditioner during a three-day heatwave in February 2017 as the reason the bill was so high. 2017/8279

Cold winter – more gas used

The customer was an Office of Housing tenant in regional Victoria. She was upset at receiving a gas bill for $323.85, because her bill for the same two-month period in 2016 was $222.93. She thought the gas meter may have been damaged when it was hit by a vehicle. The gas retailer maintained the bill was correct and the meter was working correctly. Our Investigation of the unresolved complaint confirmed that the customer’s billing was correct and based on actual meter readings. The meter was found to be operating correctly. We assessed that the customer had used more gas during winter this year, and provided her with information about how to use her gas heater more efficiently. 2017/15716

Water usage driving high bulk hot water bills

The customer had been renting her property for a year. She lived alone for the most part and was at work during the day. She said her bulk hot water bills were higher than her electricity bills and didn’t reflect the amount of hot water she used. She’d checked with other tenants in the building who had similar lifestyles and found their bills were quite a bit lower. We assessed that her hot water consumption was higher than usual. We arranged for the meter to be tested. The gas retailer maintained the billing was correct, but conceded the consumption did sound higher than usual. Our Investigation concluded that the bills were correct and the meter was operating correctly. We arranged for a site visit and water usage appliance tests at the property. It was suggested that the customer downsize her shower head as this appeared to be a contributing factor. While we were investigating her complaint, the customer’s hot water consumption fell. 2017/10236

Top Issues

Case Studies

Cases by Industry

Systemic Issues

Summary of systemic issue investigations opened and closed

July to September 2017
 

  Energy Water LPG
Open/Under Investigation 5 0 0
Closed 8 0 0

Note: Systemic issue investigations opened and closed during the above period that cannot yet be identified as
being systemic haven’t been included.

 

Systemic issues identified through EWOV's case handling

July to September 2017

Peak gas usage wrongly billed on off-peak rate

Through our case handling we identified that some customers had received letters from their gas retailer advising them that their peak gas usage had been wrongly billed on the lower off-peak tariff. Affected customers received backbills. EWOV received 8 cases. We understand some 11,873 customers were affected. The gas retailer advised us that these customers had been sent a letter telling them about the error. The undercharge was backbilled, but limited to nine months in line with the Energy Retail Code. SI/2017/19

Credit default applied for less than the amount owed

In one complaint received by EWOV, the energy retailer had applied a credit default against a customer for less than the amount owed. This meant that when the default amount was paid, the customer would still have arrears. We checked with the Office of the Australian Information Commissioner (OAIC). The OAIC advised that it didn’t have a concern about a customer’s whole debt not being default-listed, as long as any residual amount was treated with new notices and then listed according to legislative and minimum code standards. The energy retailer advised that in this case the residual debt had subsequently been paid in full by the customer. SI/2015/44

Non-compliant timeframes

In two complaints received by EWOV, the reminder notices issued by the energy retailer didn’t provide the six business days timeframe required under clauses 108 and 109 of the Energy Retail Code. The energy retailer advised us that it was working with the Essential Services Commission on provision of appropriate remediation to affected customers. SI/2016/53

Disconnection after bills don’t have pay-by dates

In three cases received by EWOV, the customer had their supply disconnected after their energy retailer issued payment plan billing without pay-by dates. Pay-by dates are required by clauses 25(1)(e), 109 and 111(1)(b) of the Energy Retail Code. The energy retailer advised us that it was working with the Essential Services Commission on provision of appropriate remediation to affected customers. SI/2016/54

Non-compliant notices

Three cases received by EWOV highlighted an issue with the notice of intent to disconnect for deemed contract customers. The notice didn’t comply with clause 115(2)(b) of the Energy Retail Code, because the welcome packs of the energy retailer didn’t contain an expiry period after which supply would be disconnected. The Energy Retail Code states a minimum period of five business days. The energy retailer advised us that it was working with the Essential Services Commission on provision of appropriate remediation to affected customers. SI/2016/55

EWOV’s contact details missing on disconnection warning notices

11 cases received by EWOV highlighted that an energy retailer had sent out disconnection warning notices that were missing EWOV’s contact details. EWOV’s details are required under clause 110(2)(f) of the Energy Retail Code. The energy retailer advised us that it was working with the Essential Services Commission on provision of appropriate remediation to affected customers. SI/2016/60

Short disconnection notice period

Through EWOV’s assessment of whether a supply disconnection was wrongful, we identified that an energy retailer’s disconnection warning notice didn’t take a public holiday into account. We were informed that some 328 customers were affected. We were advised that the Essential Services Commission was working with the energy retailer on a remediation plan. SI/2016/10

Low gas pressure during supply upgrade works

21 customers complained to EWOV about low gas pressure as a result of upgrade works in particular areas of Melbourne. We were informed that some 8,500 customers may have been affected. The gas distributor concerned advised us that it had subsequently installed three regulators to reduce the impact on customers. It said about 40% of the upgrade works in the affected areas had been completed, with the remainder scheduled for completion by August 2018. EWOV is continuing to monitor case trends in relation to this issue. The regulator has been notified. SI/2017/20

Public submissions made by EWOV

Access to Dispute Resolution Services for Exempt Customers
Australian Energy Regulator (AER)

EWOV’s submission to this AER issues paper addressed the five questions posed in the paper. In doing this, we expressed EWOV’s long-established view that all Victorian energy customers, including those supplied by exempt sellers, should have access to the same consumer protections, including access to EWOV. We also provided a series of case studies to illustrate the range of complaint issues customers of exempt sellers have raised with us, and how (in the absence of jurisdiction) we’ve assisted these customers with information and referral.

EWOV’s submission online
About this AER consultation

National Energy Retail Amendment (Strengthening protections for customers requiring life support equipment) Rule 2017
Australian Energy Market Commission (AEMC)

In responding to this AEMC consultation paper, we noted that life support machine issues aren’t a significant source of complaints to EWOV. We provided an overview of the concerns raised in the cases EWOV has received, supplementing this with a case study.

EWOV’s submission online
About this AEMC consultation

Review of the Victorian Electricity Licence Exemptions Framework – Final Position Paper
Department of Environment, Land, Planning and Water (DELP)

EWOV’s submission provided comments on the implementation approach set out in the Final Position Paper and draft General Exemption Order (GEO). We made further comments on how well the draft GEO achieves the Department’s objectives, including some suggestions for amendments.

EWOV’s submission online
About this DELP consultation

Review of regulatory arrangements for embedded networks
Australian Energy Market Commission (AEMC)

EWOV’s response to this draft report supported the AEMC’s proposal for significant reform to address the deficiencies in the existing regulatory framework for embedded networks. In particular, we welcomed the AEMC’s endorsement of Ombudsman access as a core customer protection.

EWOV’s submission online
About this AEMC consultation

Glossary

Find out more about EWOV's issue and complaint terminology.