Res Online 23 (May 2018)

Number 23
May 2018

Res Online 23 - providing up-to-date information, statistics and analysis on energy and water complaints.

Overview

The Ombudsman's View

More electricity customers will soon have access to EWOV

EWOV has long held the view that all Victorian energy customers should be afforded the same consumer protections, including access to an independent dispute resolution scheme. Since 2015, we have actively participated in government and regulatory consultations around improving protections for electricity customers in embedded networks. The Victorian Government's introduction of a new framework for electricity licence exemptions, enacted through the General Exemption Order 2017, delivers positive change for this group of customers.

In the biggest change to EWOV's jurisdiction since the scheme was extended to water complaints in 2001, customers in embedded networks will have access to our dispute resolution services. Similar developments are underway in other states and we've been working closely with the other energy and water ombudsman schemes to ensure that, to the extent possible, there's consistency in how we deal with the changes. One of our early priorities will be working with new scheme participants to build their understanding of dispute resolution in the energy and water industries. At the same time, we'll be seeking to raise awareness among embedded network customers of their rights and responsibilities.

The feature article in this issue of Res Online provides an update on the new regulatory framework and how it affects customers in embedded networks, embedded network providers and EWOV. 

Other case studies in this issue

Affordability Report

Released in early March 2018, our latest quarterly Affordability Report shines a spotlight on the issue of residential customers with large debts. It looks at recent trends in residential complaints to EWOV, from customers who owe more than $3,000 and, in some cases, more than $10,000.  Read it here.

Issues Watch: More electricity customers will soon have access to EWOV

Regulatory changes around embedded networks will improve protections for customers.

An 'embedded network' is a private electricity network that supplies homes or businesses within a specific area. Common examples include apartment buildings, caravan parks, retirement villages and shopping centres. The embedded network is connected to the wider electricity network. Usually, the embedded network operator buys electricity in bulk from this connection, and sells it on to customers inside the embedded network. As an 'exempt seller' or 'on-seller', it doesn't need to hold an electricity licence. Until now, customers in these situations haven't had the same protections or switching opportunities as customers who buy from licensed electricity providers, and EWOV couldn't deal with their complaints. When they contacted us, the most we could do was help with some general advice and refer them to another body (usually to Consumer Affairs Victoria or the Victorian Civil and Administrative Tribunal).

Exemptions for embedded network operators are now subject to new conditions.

In 2015, the Victorian Government announced a review of the regulatory framework governing electricity licence exemptions. In August 2017, the government announced a new regulatory framework for exempt electricity providers. The General Exemption Order 2017, published in November 2017, outlines the type of persons and activities that may be exempt from the requirement to obtain a licence. It also sets out conditions that must continue to be met for the benefit of exemption to apply. One of these conditions is that providers with a retail or distribution exemption must now become a member of a customer dispute resolution scheme approved by the ESC.

The ESC has approved EWOV as a customer dispute resolution scheme for the purposes of the General Exemption Order.

In its approval, the ESC confirmed its satisfaction ''that EWOV has the capacity for its scheme to:

  • be accessible to the customers of exempt persons and have no cost barrier for customers to use the scheme
  • be independent of the members of the scheme
  • be fair and seen to be fair
  • publish decisions and information about complaints received, so as to be accountable to the members of the scheme and their customers
  • undertake regular reviews of the performance to ensure it is efficient and effective''.

From 1 July 2018, we will be able to accept complaints from embedded network customers.

Following consideration by the Board and approval at a General Meeting of EWOV Limited members, the necessary changes to EWOV's Constitution and Charter were approved in mid-March 2018.

To help us prepare, we've been tracking the issues raised with EWOV by embedded network customers.

Customers in embedded networks commonly contact us because they know we deal with electricity complaints generally. From six months of data (October 2017 to March 2018), some issues trends are evident. Billing was the main issue for 70 of the 121 embedded network customers who contacted us in this period — commonly about unexpectedly high bills and/or very large price increases without warning and being unable to get the provider to respond to their concerns. 20 customers had credit complaints — mostly about disconnection, including rejected requests for payment plans, refusal of extended time to pay, disconnection for low arrears, customers claiming they didn't ever receive the bill, and high reconnection fees. The third highest category of complaint was transfer, mostly about being unable to switch to another provider.

Access to meter data

The customer complained that the exempt seller wouldn't provide him with his electricity meter’s interval data. (2017/7273)

High billing – caravan park

The customer lived in a permanent cabin at a caravan park, without choice of electricity retailer. He was dissatisfied about high bills from his exempt seller, including the daily supply charge and the high price per kWh. (2017/6732)

Disconnection – hardship

A customer with a dependent child was in financial hardship. Her supply was disconnected. She said she couldn't afford the $250 the exempt seller required to reconnect the supply. (2017/3300)

Disconnection – site ownership issue

A residential customer’s electricity supply was disconnected after confusion and errors about whether the exempt seller or a licensed retailer held the billing rights to the customer’s meter. There was also confusion about which company billed the network and usage charges. (2017/3833)

EWOV's communications strategies aim to inform both embedded network providers and customers.

  • Priorities in our current communications to embedded network providers are to:
    • Inform them that the recent changes to Victorian exemption conditions mean that they must join EWOV as a scheme participant from 1 July 2018 — and that this process requires an application and EWOV Limited Board approval.
    • Introduce them to EWOV, how the scheme operates and how (as an EWOV scheme participant) they will be required to work with us to resolve customer complaints and participate in our dispute resolution processes.
    • Inform them that EWOV is an industry-funded scheme — and that all scheme participants contribute to the running of the scheme through a proportionate joining and annual fee and a fee for service for each complaint received about them.
  • Priorities in our planned communications to customers, customer representatives and the community are to build awareness that:
    • From 1 July 2018, embedded network customers in apartment blocks, retirement villages, caravan parks and shopping centres have access to EWOV.
    • EWOV is a free and independent customer dispute resolution scheme.
    • The customer's embedded network provider will have to be an EWOV scheme participant before we can fully assist with a complaint.

We've also appointed a liaison officer for new scheme participants.

John Graham is EWOV's embedded network Member Liaison Officer. He looks forward to speaking and meeting with embedded network providers as they join EWOV.

Contact details: (03) 8672 4269 | john.graham@ewov.com.au

Top Issues

Case Studies

Cases by Industry

Systemic Issues

Summary of systemic issue Investigations opened and closed

January to March 2018
 

  Energy Water LPG
Open/Under Investigation 4 1 0
Closed 11 1 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

January to March 2018

Misleading marketing and transfer without consent

Several complaints to EWOV about one energy retailer highlighted an increase in complaints about misleading door-to-door marketing and associated account transfer without consent. The retailer confirmed it had received complaints about one of its agents and the agent's contract had since been terminated. It said it had advised its sales channels to retrain staff on the Victorian marketing codes, the consequences of fraudulent activities, and the retailer’s policies and procedures for staff conduct. SI/2016/72   

 Tariff changed without notice

Through our casework we identified that an energy retailer did not tell over 3,000 affected customers that they were on a new tariff, until six months after the change was implemented on 1 January 2017. The retailer addressed the issue by advising affected customers in July 2017 that the change would now be implemented in August 2017 and that they wouldn't be billed on the new tariff before that. SI/2017/27

Multiple calls to potential customers

Following complaints to EWOV, an energy retailer advised EWOV that it had identified issues with two of its sales channels. The first sales channel had a process whereby agents kept a record of the phone numbers of likely new customers to call them again. The retailer advised it had instructed the sales channel stop this practice. The second sales channel didn't have appropriate limits on the number of times a customer could be called. The retailer placed limits on the number of times per week the customer could be called. SI/2016/50

Disconnection of customers in need of payment assistance  

Several customers of one electricity retailer complained to EWOV that their electricity supply had been disconnected even though they identified as needing payment assistance. The retailer acknowledged that credit officers had not transferred calls to its hardship team in line with the retailer's policy and procedure. It said that all credit officers would be provided with refresher training on policies and procedures. It also advised that a Wrongful Disconnection Payment was made to affected customers. SI/2016/59

Privacy breaches

Multiple complaints to EWOV highlighted privacy breaches around customer contact details. The energy retailer advised that it had put in place a new process for migrating old customer details to new customer accounts. The retailer said it had since put in place a one-time code process for updates to customer information. If a customer requests a change to their information online, a code (combination of numbers) is sent to the registered email address and the customer must enter this number before being able to make changes to the online account. SI/2017/23

Phone contact problems

Multiple complaints to EWOV highlighted that customers were having trouble contacting an energy retailer's call centre. The retailer acknowledged the issue. It advised us that it had employed more customer service operators, installed new phone lines, and upgraded existing telephone systems to ensure the technology would be able to support increased call volumes. SI/2018/10

Disconnection after payment made

In multiple complaints to EWOV, the customer's supply was disconnected even though they had paid their arrears. The retailer advised us that checking payments and disconnection service orders had been a daily task assigned to a particular team member. As a result, the task wasn't completed if that team member wasn't in the office. The retailer said it had changed the process to ensure the check is completed each day. SI/2018/18

Billing delays due to systems problems

Two complaints to EWOV highlighted an energy retailer's billing delays. The retailer confirmed that an issue with its email server, which had affected the sending of bills by email and post to about 2,300 customers. It advised that the bills of affected customers had been reversed and reissued with a new due date. It said it had also introduced enhanced system reporting, to ensure it can monitor servers to detect and correct issues as soon as they arise. SI/2018/11

Non-compliant disconnection notices 1

Through two complaints to EWOV, we identified that an energy retailer’s disconnection notices didn't comply with the Energy Retail Code. In providing EWOV's contact details, the disconnection notice used the general reference 'state energy ombudsman'. The disconnection notice also failed to include a statement that customers with Smart Meters could have their supply de-energised remotely. The retailer advised that it had corrected the notice defects, and had assessed and made Wrongful Disconnection Payments to affected customers. SI/2018/2

Non-compliant disconnection notices  2

Through two complaints to EWOV, we identified that an energy retailer wasn't providing an expiry date on its notice of intention to disconnect. This meant the notice did not comply with Energy Retail Code clauses 112(1)(b) and 115(2)(b). The retailer provided a copy of its new notice of intention, which warns of the disconnection and includes the date by which the customer must contact it. It said there were 66 disconnections of deemed customers who received the non-compliant notices. Of these, 47 were electricity customers disconnected outside of 180 days, so a Wrongful Disconnection Payment (WDP) was not payable; 2 were gas customers disconnected outside of 120 days, so a WDP was not payable; and 17 were electricity customers disconnected under 180 days, so a WDP was paid. SI/2016/26

Too many collection contacts

Multiple complaints to EWOV highlighted that an energy retailer was making frequent automated credit collection contacts, which could amount to undue harassment. The number of contacts was more than the maximum of three contacts a week or 10 per month for actual (phone/letter) contact recommended under section 5(c) of the ACCC’s Debt collection guideline: for collectors and creditors. The energy retailer advised that (effective November 2017) it had reviewed its processes and made system changes, reducing the number of contacts from its automatic dialler to comply with the ACCC guideline. SI/2017/13

Water

No bill or final notice

A water corporation told EWOV that about 3,000 customers didn't receive a December 2017 bill, or the subsequent final notice, because of a shortcoming in its quality checking procedure. It said that new bills were issued to all affected customers, with an extended due date. It also advised that customers who called about the issue were given a $50 credit as an acknowledgement of the inconvenience. It said that its bill distribution service provider had replaced the staff in charge of the quality checking procedure. The water corporation advised that it would monitor bills to ensure the issue doesn't reoccur. SI/2018/4

Public submissions made by EWOV

Issues Paper – Draft amendments to the electricity network service provider registration exemption guideline

Australian Energy Regulator (AER)

We welcomed the AER's intention to replicate the dispute resolution and ombudsman conditions proposed in the Draft Retail Exemption Selling Guideline, to harmonise the provisions for retail and network exemptions. However, we also reiterated a concern EWOV has expressed previously — that the AER does not propose to extend external dispute resolution (EDR) access to small business customers of exempt sellers. EWOV handles complaints from both residential and small business customers — the scope of this role is not overly burdensome and, in our view, necessary to ensure equitable outcomes for all energy customers. We continue to encourage the AER to extend EDR access in the National Energy Market to small commercial and retail businesses.

EWOV's submission online  

About this AEMC consultation

Draft Decision – Register of non-licensed electricity providers: registration guideline (information for registration and public register)

Essential Services Commission (ESC)

EWOV strongly supported the ESC's proposed approach to a registration system for non-licensed electricity providers. Most non-licensed providers required to register will need to do so by 1 July 2018. A registration system would make it much easier for EWOV to manage the process of accepting new members, in what is likely to be a short timeframe. As we have been preparing for this major change, it's become apparent that obtaining necessary and complete information about non-licensed electricity providers is often difficult. Having transparent information — about who these providers are and how they can be contacted — easily available on a register would speed up the process of signing up to EWOV. This would mean that more customers and providers would have access to EWOV's dispute resolution process from 1 July 2018. We noted that the ESC proposes to collect, but not publish, information about the number of customers being sold or supplied electricity. Given EWOV's membership fees are likely to be tied to a provider's customers, we foreshadowed that EWOV would seek access to this information, even if it is not published.

EWOV's submission online

About this ESC consultation

Glossary

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