Res Online 25 - November 2018

Number 25
November 2018

Res Online 25 - providing up-to-date information, statistics and analysis on energy and water complaints.

Overview

The Ombudsman's View

Bedding down EWOV's new jurisdiction

In this issue of Res Online, we report on the first three months of EWOV's expanded jurisdiction to embedded networks. So far EWOV has 92 new embedded network scheme participants in 327 sites across Victoria. This gives over 35,000 more customers access to EWOV's dispute resolution services.

It's early days, but the complaints lodged by embedded network customers generally reflect those EWOV receives from customers of licensed electricity retailers. For example, we received 124 embedded network cases from July to September, 76 of them about billing. We're also seeing a high level of customer dissatisfaction with how hard it is to take advantage of a market contract and/or switch retailer. We're drawing on EWOV's case experience in our discussions with the Essential Services Commission and policy makers, as they consider how to overcome these issues. Our report on EWOV's first quarter of dealing with embedded network cases includes two case studies, one residential and one business. 

Keeping a close eye on natural gas billing cases

After a 1% fall last year, natural gas billing cases are on the rise. Over the last quarter we've seen an overall increase of 109%. Within this, cases about high gas bills were up 306% and cases about billing errors were up 90%. A particularly cold winter may be one driver. Prices rises may be another. We'll continue to monitor and report on this trend.

Other case studies in this issue

2018 Annual Report

We released EWOV's 2018 Annual Report on 16 October. We received 34,524 cases (up 8% from 2016-17) and issues about billing, credit and provision made up the 'top 5' issues of complaint:

  • For the first year since 2012-13, high bill was the top issue overall. 87% of high bill cases were about energy. Electricity high bill cases were up 17% and gas high bill cases were up 28%. Water high bill cases fell 14%.
  • Disconnection or restriction of supply for debt was the second most common issue. Cases were up 1% from 2016-17. 97% of cases about disconnection or restriction for debt were about energy.
  • Debt collection/credit default listing was number three, with cases down 5% from 2016-17. 97% of cases about debt collection/credit default listing were about energy.
  • New connection cases more than doubled (from 1,225 to 2,502) taking it to number four.
  • Existing connection was number five, with cases up 9%.

Read our Media release (PDF), and watch our video summaries and data visualisations.

Cynthia Gebert

Energy and Water Ombudsman (Victoria)

Embedded network cases and issues

Free and independent dispute resolution is a big step forward, but …

Since July 2018, Victorian electricity customers in embedded networks have been able to lodge complaints with EWOV. Access to EWOV is a big step forward for tens of thousands of people living in retirement villages, caravan parks and apartment buildings, and for small businesses operating in shopping centres.

Despite the positive changes, embedded network customers tell us they're frustrated by the complexities of getting different offers and switching retailer — to the point that they just give up.

In the first three months of EWOV's new jurisdiction, we received 124 embedded network cases.

Billing was the top issue, raised in 76 cases:

  • high (26 cases)
  • tariff (21 cases)
  • fees and charges (9 cases)
  • backbill (8 cases)

Transfer (the process of switching electricity retailer) was raised in 15 cases. 14 of these were about an objection raised when the customer tried to switch, usually related to metering.

Embedded network customers have the right to switch retailer but, in practice, there are significant barriers.

For many embedded network customers, going 'on-market' — to take advantage of a market contract and/or switch retailer — is a highly complex process. Some customers have told us they tried to switch, but couldn't find any retailers that would make contracts available.

The switching process also relies heavily on action being taken by the embedded network manager, and on specific metering arrangements. The customer's preferred electricity retailer must ask the embedded network manager to arrange for a National Meter Identifier (NMI) to be assigned to the customer’s 'child' meter (under the property's 'parent' meter). Once the embedded network manager has done this, the NMI standing data needs to be updated in the Market Transfer and Settlement Solution (MSATS). Until the NMI standing data is updated and an MSATS tariff code is applied, the customer is unlikely to get an offer from their preferred retailer.

If either the embedded network manager or the preferred retailer doesn't do its part properly, the customer may find themselves in a frustrating and unsatisfactory loop of uncompleted actions. The situation is even more complicated where a 'child' meter doesn't meet the standards necessary for the customer to go 'on-market' and requires an upgrade, at the customer’s cost. EWOV is in discussions with the Essential Services Commission and policy makers about the regulatory and policy settings needed to overcome these issues.

Help for customers: EWOV's Switching for customers in embedded networks fact sheet.

There are hundreds of embedded networks in Victoria, some of them quite small.

An embedded network is a private electricity network, which supplies homes or businesses within a specific area. It's a common arrangement in shopping centres, retirement villages, apartment buildings and caravan parks. The embedded network is connected to the wider electricity network. Usually, the embedded network entity buys electricity in bulk from this connection, and sells it on to customers inside the embedded network.

Sometimes customers don’t know they're in an embedded network. Many embedded networks use an agent to send bills and provide customer service. Some of the larger agents are WinConnect, Energy On, Active Utilities, ENSA, Energy Intelligence, Benergy, iGENO and Network Energy Services.

We advise customers who aren't sure whether they're in an embedded network to check with the body corporate, the operator of the caravan park or retirement village, or the company named on their electricity bill. Customers can also check the Essential Services Commission’s public register.

Already, over 35,000 more electricity customers have access to EWOV.

EWOV now has 92 embedded network scheme participants (completed applications).

These cover 327 embedded network sites across Victoria:

  • 8 retirement villages/residential villages with 1,216 customers
  • 251 apartment buildings/owners' corporation buildings with 28,791 customers
  • 68 caravan parks with 5,040 customers.

As more completed applications to join EWOV are processed, the number of sites will increase. We anticipate that up to 100,000 Victorians may be affected.

More information on EWOV's website:

Embedded Network Case Study One

The experience of a residential customer

Case number: 2018/23061

Having moved into her apartment, Ms G found it was serviced by an embedded electricity network. Ms G was used to having choice of electricity retailer. She was dissatisfied with the offer from the embedded network manager (in this case an electricity retailer), which didn't include off-peak rates. She was seeking a bundled offer, or one with pay-on-time or other discounts. She didn't understand why this wasn't being offered and she couldn't work out how to switch to another retailer.

Frustrated by the situation she found herself in, Ms G complained to EWOV. We registered her complaint as an Assisted Referral and facilitated contact with her by a higher-level contact within the electricity retailer. Ms G returned to us dissatisfied that the retailer had said it couldn't alter the property's existing electricity plan. We opened an Investigation.

Responding to EWOV’s investigation, the retailer confirmed its advice to Ms G that it couldn't provide different tariffs (or a peak/off-peak split) and a discount, because the property was within an embedded network. It said that, if Ms G owned the property, she may be able to start the process to remove the property from the embedded network.

We reviewed the contract, contact notes, meter data, account reconciliation, billing and usage recorded for the property. We also reviewed the relevant laws and codes for embedded networks.

Ms G confirmed that she wished to transfer out of the embedded network. We checked with the Australian Energy Market Commission to confirm the process for getting an embedded network customer 'on-market'.

After considerable discussion with a metering co-ordinator, a new retailer and the embedded network manager, the meter at Ms G's property was assigned a National Metering Identifier (NMI). The NMI was then updated on the national distribution database (MSATS) to include the meter and network tariff details.

During this process Ms G realised she would receive two bills if she proceeded with a transfer to another retailer — one bill from the embedded network manager (network charges) and another from the new retailer (usage charges).

As a result, and even though she remained dissatisfied with the situation and her limited options, Ms G decided to stop the process and return to the embedded network. 

Embedded Network Case Study Two

The experience of a business customer

Case number: 2018/13373

Mr P, a business customer, complained that the embedded network manager (an electricity retailer) wouldn't honour the rates he'd been offered. 

We registered Mr P's complaint as an Assisted Referral and facilitated contact with him by a higher-level contact within the electricity retailer. Mr P returned to EWOV still dissatisfied with the retailer's response. We opened an Investigation.

We received and reviewed information about the contract, tariffs and pricing, and contacts between Mr P and the retailer. Responding to our Investigation, the retailer advised that the letter Mr P received from the developer/owners corporation was intended for residential occupants only. There was a different letter and contract offer for business occupants.

We assisted Mr P with information on the transfer process and his switching options. Essentially, he could move from the retailer's embedded network business plan to one of its 'on-market' business plans. As part of this process, the retailer would raise a request to have an NMI allocated to his business premises that he could use for a future switch. Or, he could accept an ‘on-market’ business plan with a different retailer, specifying that he wanted to exercise his 'power of choice' and transfer out of the embedded network. The new retailer would need to raise a 'business to business' request to the first retailer through MSATS to organise a contestable NMI, to bring the meter for Mr P's business back 'on-market' (an 'allocate NMI' service order).

The retailer confirmed this advice, adding that should Mr P switch, it would still need to bill him for supply charges, as it is the embedded network manager. His usage charges would be billed separately by the new retailer. To recognise the inconvenience caused by the contract confusion, it provided Mr P with $633 in customer service credits.

Mr P accepted this outcome. The complaint was closed. 

Top Issues

Case Studies

Cases by Industry

Systemic Issues

Summary of systemic issue Investigations opened and closed

July to September 2018
 

  Energy Water LPG
Open/Under Investigation 2 0 0
Closed 9 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 2018

Reminder notices short on business days

Through EWOV's casework, we identified that even though an energy retailer's reminder notices factored in public holidays, they didn't give enough business days for the customer to make a payment.  As a result, the notices didn't comply with clause 109 of the Energy Retail Code which requires a reminder notice period of no less than 6 business days. EWOV received three related complaints. We understand about 135 customers were affected. The retailer advised that the error, detected in June 2016, went back to March 2015. It said it had manually adjusted its credit cycle to address public holidays in 2016. In March 2017, it implemented a system change to prevent a reoccurrence. The retailer said it had made wrongful disconnection payments to all 135 affected customers. SI/2016/63

Unclear contract renewal documentation

Through EWOV's casework, we identified that the renewal documentation for an energy retailer’s customer contracts was unclear on whether the entitlement to Gold Class Movie Tickets also applied when the contract renewed automatically. We drew it to the retailer's attention. The retailer undertook to amend the wording on its new batch of renewal letters to make it clear that the customer must sign up to a new contract to continue receiving the tickets, not just allow the contract to renew. SI/2018/19

Inaccurate solar billing

Through EWOV's casework we identified issues with one electricity retailer's solar billing that affected around 12,000 customers. For customers with solar export, the electricity usage information on the energy retailer’s bill combined both import and export figures in both the graph and average daily usage. This wasn't compliant with the requirements of Clause 25 (1) (k) of the Energy Retail Code. The energy retailer made a system change to ensure that, going forward, the bills accurately showed the average daily usage, the average daily cost, and the average daily cost for each tariff component (for example peak and off-peak). The average daily usage, cost figures and the graph now don't include export. The bills now comply with clause 25 of the Energy Retail Code. SI/2018/6

Scheduling of truck appointments

Through EWOV's casework, we identified a systemic issue involving scheduling and rescheduling of truck appointments by registered electrical contractors (RECs) using an electricity distributor's online portal. While RECs could reschedule a truck appointment, the portal didn't update the distributor’s scheduling tool and, as a result, the appointment wasn't rescheduled. The distributor said it was planning to remove the rescheduling facility from the portal. In the interim, an automated message on the portal sign-in page would tell RECs to ring a dedicated telephone number to reschedule appointments.  SI/2018/36

Large rate increases

EWOV's casework highlighted that an energy retailer had raised its rates by large amounts. We received 14 complaints and we understand 2,364 customers were affected. The retailer advised that the increases affected customers on its variable rate and customers who had been recontracted after their previous contract expired. SI/2018/37

Billing delays

EWOV's case handling highlighted billing delays for some of an energy retailer’s customers. The retailer said that meter readings weren't being correctly processed in its billing system to allow automatic billing. It was working on a solution. Until that was implemented, it was checking the accounts of the 108 affected customers manually each week and then billing as required to prevent ongoing billing delays. SI/2018/16

Billing data mismatches

Through EWOV's case handling, we identified that the start and end readings in an energy retailer’s bills didn't match the billed usage sourced from the interval data. Our analysis revealed that, while the retailer was using the correct end index read, it wasn't using the correct start index read. Though customers’ bills were found to be correct, the methodology wasn't compliant with clause (25) (1) (y) of the Energy Retail Code. The issue affected all the retailer’s bills. It implemented a system fix. Its bills now display the correct start index read, and the difference between the start and end reads now matches the consumption billed. SI/2018/9

Inconsistent calculation of GSL payments

Through EWOV's case handling, we identified a problem with an electricity distributor’s calculation of Guaranteed Service Level (GSL) payments. Where there was an incident on the distributor’s network which caused a group of meters to go off supply, the distributor calculated the GSL payment from the time of the outage. Where a single meter went off supply due to an outage, it calculated the GSL payment from the time the customer informed it of the outage. This meant some customers received a lower GSL payment than they were entitled to. The distributor advised that it would change its approach to ensure that, where a single outage was reported by a customer, the GSL would be paid from when the power went out. SI/2018/17

Offers to customers in a non-contestable area

Through EWOV's case handling we identified that a gas retailer was wrongly providing offers to customers in a non-contestable area of Victoria. The retailer addressed the situation by writing to the customers who were wrongly sold gas to advise their contracts were cancelled. It said that all affected customers were able to transfer back to the retailer for the area. It said it had also implemented a systems change to ensure that, in future, customers in non-contestable areas don't progress through its sales process at all. SI/2018/44

Public submissions made by EWOV

Draft Decision: Energy Retail Code obligations for exempt sellers under the general exemption order 2017

Essential Services Commission (ESC)

This draft decision sets out initiatives to keep customers informed of changes affecting their bills and whether they could access a better offer from their retailer. In EWOV's submission, we highlighted clauses of the new Energy Retail Code which we think could be changed, strengthened or retained. We recommended keeping clauses about publishing standing offers on retailer websites, as an important part of the effective operation of the licensed retail energy market. We suggested that the ESC provide a billing template for use by exempt retailers. We welcomed the retention of restrictions on recovering undercharged amounts. We supported the inclusion of Centrepay as a means of minimising payment difficulties and complaints.

EWOV's submission online

About this ESC consultation

Draft decision:  Building trust through new customer entitlements in the energy retail market

Essential Services Commission (ESC)

This draft decision outlines how the ESC proposes to implement the first tranche of recommendations from the Independent Review of the Electricity and Gas Retail Markets in Victoria, supported by the Victorian Government in March 2018. The recommendations outline new regulatory obligations for energy retailers. On the basis that customers should have the genuine benefit of the 'best offer' for them based on their energy usage, we supported inclusion of the 'best offer' on bills in a way that enables clear and easy access for all customers. We also made a number of other suggestions about the dollar threshold, change notices and exemptions (supporting the last with case examples).

EWOV's submission online 

About this ESC consultation

Glossary

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