Res Online 26 - February 2019

Number 26
February 2019

Res Online 26 - providing up-to-date information, statistics and analysis on energy and water complaints.

Overview

The Ombudsman's View

A quarterly fall in cases, with a watch on some issues 

In the October to December 2018 quarter, EWOV cases fell across the board against the July to September 2018 quarter — down 13% overall, down 12% in electricity, down 15% in natural gas, down 13% in LPG, and down 17% in water. Notwithstanding that positive development, we’re closely watching a couple of issues.

One of those issues is whether customers are being sufficiently informed about payment plans before facing disconnection of their energy supply. Disconnection of supply is a last resort, but an energy retailer may disconnect in certain circumstances. If the retailer doesn’t follow the required procedures, the customer may be eligible for a wrongful disconnection payment (WDP). Where a complaint to EWOV involves disconnection of supply, it’s our role to assess whether the disconnection was wrongful. In the October to December quarter, we finalised 268 WDP assessments. In over 50% of these assessments, we found that the required payment plans weren’t offered, or information about the availability of a payment plan wasn’t provided. With payment assistance a particular focus of Victoria’s new ‘Payment Difficulty Framework’ (in effect since 1 January 2019), we expect that retailers will be reviewing their processes to ensure customers are being offered all appropriate assistance. More here

Another ‘on watch’ issue has emerged from provision cases, where customers have complained about voltage variation affecting their solar system. Complaints include the solar inverter dropping out, falls in solar credits, and damage to the solar inverter from power surge. So far there is no clear driver for the increase, but it has been suggested that possible causes include how distribution network flows are managed and the potential effect of more solar installations. More here 

Other case studies in this issue

Affordability Report

The next issue of EWOV’s Affordability Report will be released in March 2019.

Cynthia Gebert

Energy and Water Ombudsman (Victoria)

Cynthia Gebert

Energy and Water Ombudsman (Victoria)

If you have any feedback about Res Online, please contact Janine Rayner, EWOV's Communications and Policy Manager at: janine.rayner@ewov.com.au.

Gas billing cases

In the October to December 2018 quarter, EWOV received 1,545 gas billing cases overall (natural gas and LPG) — down 8% against gas billing cases for the July to September 2018 quarter.

Continuing our watch on natural gas billing issues — over the last quarter, high bill cases fell 17%, billing error cases fell 17%, backbill cases were up 45%, and billing estimation cases were up 14%.

On issues watch: Wrongful disconnection of electricity and gas

A Wrongful Disconnection Payment (WDP) is payable if an energy retailer hasn’t complied with the terms and conditions of its contract with the customer, and the requirements of the Energy Retail Code, before
disconnecting electricity or gas supply. The payment is currently $500 a day (or part thereof), capped at $3,500 if the customer doesn’t make contact with the retailer within 14 days. Where a customer
complains about an actual disconnection, EWOV makes a separate assessment of whether a WDP is payable. Where the retailer and EWOV can’t agree on an outcome, we request a formal decision from
the Essential Services Commission.

In the October to December quarter, EWOV opened 162 WDP assessments.
90 (56%) were for electricity disconnection and 72 (44%) were for gas disconnection.

In the October to December quarter, EWOV finalised 268 WDP assessments.*
*Some of the WDP assessments finalised in the October to December quarter were opened in previous quarters.
149 (56%) were for electricity disconnection and 119 (44%) were for gas disconnection.
145 of finalised WDP assessments resulted in a payment. 61% of payments were under $1,000 and 39% were over $1,000. The largest was $50,915.79.

54% of finalised WDP assessments related to payment plans — either not offered or information not provided.

A further 6% related to multiple breaches, generally involving affordability issues and possibly also payment plans. 12% related to non-compliant notices, for example, the retailer didn’t adhere to the required timeframes, or didn’t issue the required notices.

There were also five WDP decisions from the Essential Services Commission (ESC).
Three were about payment plans (two payable; one not payable), one was about warning notice (not payable) and one was about resolving the customer’s complaint before disconnection (not payable).
These (and other) WDP decisions are on the ESC website.

On 1 January 2019, a new ‘Payment Difficulty Framework’ came into effect in Victoria.
This new regulatory framework introduces significant changes to energy retailer obligations and the process retailers must follow before disconnection of the electricity or gas of customers experiencing affordability issues. The type of assistance a customer must be offered is now based on how much the  customer owes — whether the debt is under $55, or $55 or more. With payment plans the most common reason for WDPs in the October to December 2018 quarter, EWOV will be closely monitoring how retailers respond to their changed obligations under the new framework. 

EWOV’s Energy Payment Difficulties fact sheet explains.

Case study 2: Wrongful disconnection payment - retailer’s WDP obligations stand, despite customer’s lack of engagement

History of payment plans and non-payment; customer drops out of EWOV’s Investigation process
Case number
: 2018/26091 and WDP/2018/866
Mr R said his electricity was disconnected in mid-October 2018 without notice, and his electricity retailer wanted the arrears paid in full before it would reconnect. Mr R asked that the retailer consider a payment plan of $450 a fortnight. In line with EWOV’s Reconnection/Derestriction Policy, we arranged
for Mr R’s electricity to be reconnected, and we opened an Investigation. 

Responding to EWOV’s Investigation, the retailer said that this was the fourth time Mr R’s electricity had been disconnected for non-payment. It said that, since 2015, it had provided Mr R with hardship assistance in the form of payment arrangements, all of which he had broken. It said that Mr R was sent three sets of Utility Relief Grant forms in 2018, but no completed forms had been received back from him. The retailer said it had also applied $109.36 in missed concessions (from January to October 2018) as a goodwill gesture, even though Mr R had not provided an updated concession card (since it had expired).

As part of EWOV’s Investigation, we reviewed Mr R’s usage data, billing, payment plans, and the retailer’s notes of its contacts with him. We confirmed the previous supply disconnections for nonpayment, and that the retailer had offered payment arrangements that weren’t met, including three broken hardship payment plans during 2018. Most recently (in August 2018) the retailer and Mr R had agreed on a $50 a week plan, for which no payment was received. We confirmed that Mr R had been sent three Utility Relief Grant forms in 2018, none of which had been submitted to the Department of Health and Human Services. We also confirmed the account credit of $109.36.

Mr R owed $3,361.77 for billing to early October 2018. His last payment was $50 in December 2015. The retailer offered him a new tariff, which increased his ‘15% off consumption’ to ‘45% off consumption’ if he paid his future bills on time. It provided a direct contact for him to discuss the offer. The retailer maintained that Mr R wasn’t entitled to a wrongful disconnection payment (WDP), because it had sent him the required notification, offered payment assistance (via four payment plans in the 12 months prior to disconnection) and he had made contact only after his supply was disconnected.
In line with EWOV’s policy, we attempted to contact Mr R to arrange part-payment of his arrears and convey the retailer’s response to our Investigation of his complaint.

When Mr R didn’t respond to our attempts to contact him, we closed EWOV’s Investigation of his complaint on the basis of his non-participation.

Even though we closed the complaint, we completed EWOV’s separate assessment of whether the latest disconnection of Mr R’s electricity was wrongful. We found that the retailer could substantiate that one payment plan had been correctly established, but not any others. The retailer reviewed its records of compliance and agreed that, because of this, a WDP was applicable. 

Because Mr R was off supply for seven days, eight hours and 15 minutes, he was entitled to a WDP of $3,671.88. This was applied to his electricity arrears, leaving his account $310.11 in credit.

Top Issues

Case Studies

Cases by Industry

Systemic Issues

Summary of systemic issue Investigations opened and closed

October to December 2018
 

  Energy Water LPG
Open/Under Investigation 0 0 0
Closed 16 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

October to December 2018

Energy

Faulty meters
Our case handling showed that a type of three-phase meter appeared to be faulty. Following investigations by the energy distributor and the meter manufacturer, a fault was found in a small percentage of meters. The distributor said it addressed the issue by developing and installing software that enabled it to identify the faulty meters. It concluded that the meter ‘fail rate’ was far below that required by the regulations for an entire meter population to fail, and therefore require removal from service. On this basis, the distributor assessed that this type of meter could continue to be used. SI/2017/1

Two numbers for same meter
Our case handling revealed instances where two separate Meter Installation Registration Numbers (MIRNs) were created for the same address and the same gas meter. The gas distributor advised that it had reviewed its new connection process to address the problem. SI/2018/23 

Connections information sent to other customers
An energy retailer’s new connections team sent a customer’s information to three separate unrelated email addresses. The retailer said its privacy group had since implemented a process for contacting recipients of emails sent in error. A standard disclaimer about intended recipients had also been included
on all emails from the New Connections Team. It said the staff member responsible for the error had been retrained. SI/2018/27

Confusing representation of concession entitlements
The representation of concession entitlements on an energy retailer’s bills was found to be confusing. Even though the annual electricity concession was being applied, it appeared not to be. The retailer said that the source of the confusion was additional information on its bills about the Excess Energy Concession. It reviewed the billing format, so that this information wasn’t included until the customer had reached 80% of the Excess Energy Concession cap. The changes were to be implemented by the end of 2018. SI/2018/30

Connection delays after industrial action
Industrial action by an energy distributor’s employees had been causing connection delays. The distributor’s position was that industrial action was a force majeure event outside of its control, so it wasn’t liable for customer claims related to the delays. It also said that under its contract it wasn’t liable for any indirect loss as a result of the delay. We received six related complaints. The distributor provided payment, without admission of liability, to all customers with open EWOV complaints about the issue. SI/2018/34

Credits not received during daylight saving
Our case handling showed that some customers, who were meant to receive credits for their usage between 6am and 7am every day, didn’t receive the credits in daylight saving periods. The energy retailer found that a trigger in its billing system wasn’t adjusting for daylight saving for customers in one distribution network. The retailer addressed the problem and provided the 26 affected customers with their missing credits. SI/2018/35

Screening of online applications
After we identified an issue with an energy retailer’s screening of online applications, the retailer reviewed its sign-up processes. It made changes to identify fraudulent applications and introduced validation checks to help ensure that only legitimate applications were processed. It scheduled these enhancements for implementation in the following three months. SI/2018/36

Concession wasn’t being applied
Through our case handling, we identified that an energy retailer wasn’t applying the service to property charge concession to the bills of some eligible customers. We understand 41 customers were affected. The retailer advised that a change in its billing system would resolve the problem for customers billed after late October 2018. Customers billed before this would have the concession applied manually. SI/2018/40

Solar credits wrongly described 
On its bills, an energy retailer described solar credits as ‘solar import’, instead of credits for the electricity the customer had exported to the grid. After we drew this to the retailer’s attention, it corrected its bills to say ‘solar export’. SI/2018/41

Solar generation wrongly described
Through our case handling, we found that the solar consumption graphs in an energy distributor’s online portal referred to ‘solar generation’, when the reference should have been to ‘net generation’ (solar generation less the electricity used at the property). The distributor acknowledged the error and corrected it. SI/2018/42

Gas marketing in a non-contestable area
Our case handling revealed that an energy retailer had been marketing gas offers and discounts to customers in a part of Victoria where no discounted offers were available, because the area was designated ‘non-contestable’. The retailer updated its mailing lists to remove excluded addresses/postcodes. It also provided its mailing house with instructions not to send marketing to certain excluded address/postcodes. SI/2018/43

Marketing to elderly and vulnerable customers
From our case handling, we identified an issue with an energy retailer’s marketing to elderly and vulnerable customers. The energy retailer investigated and implemented training, supervision and processes to reduce the risk of the issue arising again. SI/2018/45

Marketing email disclosed information of other customers
An energy retailer sent customers a marketing email in which the email addresses of other recipients were visible. The retailer apologised to the 202 affected customers. As an interim measure, it directed its sales representatives to stop bulk email mailouts. It committed to delivering permanent improvements to its email functionality by the end of December 2018. SI/2018/47

Misleading quoting of solar feed-in rate
An energy retailer’s website and contract material gave the impression that Premium Feed-in Tariff (PFiT) customers would receive $0.713 per kWh fed into the grid, rather than $0.60 per kWh. The retailer amended the information in its contract material and website. It apologised to affected customers,
provided account credits, and offered to move them to its best market offer. It also provided them with advice about the Victorian Government’s comparison website. SI/2018/51

Large price increases on variable contracts
We received complaints from 30 customers who were unhappy with large price rises on their variable contracts. The retailer confirmed that price changes for about 33,000 customers took effect between 1 October and 30 November 2018. Depending on the customer’s distribution area and usage profile, the increase was between 4% and 39% of their total bill. SI/2018/53

Water

Privacy breach
A water corporation notified EWOV of a privacy breach, which came about when an email it sent to some customers displayed another customer’s name, property address, email address and amount owing. The water corporation said it sent a follow-up email to 907 customers the same day advising of the error. It also informed the Department of Environment, Water, Land and Planning and the Office of the Australian Information Commissioner. The water corporation’s investigation concluded that the breach was due to human error. It said it had changed its procedures to help prevent a repeat of the issue. SI/2018/54

Public submissions made by EWOV

Draft Position Paper – Default Market Offer Price

Australian Energy Regulator (AER)

In EWOV’s response to the position paper, we noted that the Default Market Offer (DMO) was being developed at the same time as the Victorian Government had committed to developing a Victorian Default Offer (VDO). We provided EWOV’s comments on the basis that the policy intents of the DMO and VDO are reasonably similar, and the experiences of customers assisted by EWOV were relevant and could inform both consultation processes.

EWOV's submission online

About this AER consultation

Glossary

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