Res Online 27 - May 2019

Number 27
May 2019

Res Online 27 - providing up-to-date information, statistics and analysis on energy and water complaints.

Overview

The Ombudsman's View

Two major initiatives are working to strengthen the customer protection framework for Victoria's energy customers. In this issue of Res Online we report, from EWOV's perspective, on each of them.  

Since mid-2018, EWOV has been able to accept complaints from electricity customers in embedded networks. Our coverage now extends to 78,404 embedded network customer connections. However, there are still more than 54,000 customer connections where we can't help, because the embedded network entity is yet to join EWOV. We're actively pursuing the entities associated with these sites.

Aligned to this, despite our efforts to make the application process efficient and streamlined, we're finding that many embedded network entities know little about their new regulatory obligations. This means membership applications often require considerable EWOV administrative assistance and multiple contacts.

The process is further complicated by the fact that embedded networks are subject to both distribution (supply) exemptions and retailer (selling) exemptions, which are often held by different parties (known as exempt persons). For EWOV to be able to address all aspects of embedded network customer complaints, both 'exempt persons' must be EWOV scheme participants. There's more information on embedded network cases here

Victoria's new Payment Difficulty Framework (PDF) took effect on 1 January 2019. In the last issue of Res Online I foreshadowed that, with payment assistance a particular PDF focus, EWOV would be expecting energy retailers to review their processes to ensure customers are offered all appropriate assistance.

With EWOV's purpose being to reduce the occurrence of complaints, as well as resolve disputes, we're using our cases to help scheme participants understand their new obligations under the PDF. Poor responses to complaints are being pursued and EWOV Investigations upgraded.

As well as helping us deliver fair and reasonable PDF-compliant dispute resolution outcomes, this approach is drawing scheme participants' attention to inadequate responses and the cost of staff not being properly equipped to address the retailer's PDF obligations. 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 latest issue of EWOV's Affordability Report, released in March 2019, covers the six months from July to December 2018. It focuses on customers whose energy and water consumption is greater than their capacity to pay. In the second half of 2018, 24% of the credit Investigations EWOV completed involved customers who couldn’t afford to pay the costs of their energy or water consumption. Some customers could afford to pay for just half of what they were using.  

You'll find our most recent Affordability Report on our website here.

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.

Issues Watch

Payment Difficulty Framework update

From 1 January to 31 March 2019, EWOV closed 1,226 electricity, gas and dual fuel credit cases.

This included 233 Investigations, 875 Assisted Referrals (where the retailer must follow up with the customer to resolve the complaint) and 115 Unassisted Referrals (where the customer had not yet contacted their retailer).

Through conciliated outcomes from EWOV Investigations, 116 customers received entitlements under the Payment Difficulty Framework (PDF). Of these customers, 20 received Standard Assistance and were assisted through payment plans; and 26 were provided Tailored Assistance, available to customers with a debt of $55 or more.

Significantly, we identified that a further 27% of customers (31) should have been offered Tailored Assistance. However, in these cases, the energy retailer wrote the debt down rather than provide the customer with appropriate help under the PDF. These cases spanned 11 retailers. While this is a short-term solution for retailers and their financially vulnerable customers, it doesn’t address the long-term issue of customers who can't afford to pay for their ongoing energy use. 

For customers experiencing the greatest level of payment difficulty, access to their PDF entitlements through EWOV led to 16% (19) of them being offered a payment plan with their arrears on hold and paying below consumption for a minimum of six months. Another 6% (7) were placed on payment plans enabling them to pay off their arrears over two years.

An important feature of the PDF is that energy retailers provide practical assistance to customers receiving tailored assistance — as a means of supporting them to meet payment obligations and remain on supply. Most of the customers who received tailored assistance as a result of EWOV's Investigation were given information about the Utility Relief Grant Scheme (URGS) or concessions.

Or, as part of practical assistance, they received a tariff review or advice to lower their energy use and reduce energy costs. Under the new guidelines, these customers — and those we assisted through Unassisted and Assisted Referrals — should have been offered the appropriate level of assistance (standard or tailored) without lodging a complaint with EWOV.

We'll continue to highlight PDF issues and trends in future editions of ResOnline.

EWOV’s Energy Payment Difficulties fact sheet explains.

Embedded Network Cases 

On 1 July 2018, EWOV's jurisdiction was extended to include embedded networks, an arrangement commonly found in apartment buildings, caravan parks, retirement villages and shopping centres.

To 31 March 2019, 168 entities had joined EWOV. These entities cover 629 sites and 78,404 customer connections. There's a list of EWOV's embedded network scheme participants on our website. A further 86 entities (covering 123 sites) have lodged applications which are currently under assessment.

In the nine months to 31 March 2019, EWOV has received 315 embedded network cases. Unfortunately, more than half of these were out of EWOV'S jurisdiction, because the entity complained about wasn't an EWOV scheme participant at the time the customer contacted us.  This has started to be remedied, with contact being made with those customers once the entity has joined EWOV, to progress their complaint if it remains relevant.

Trends in embedded network cases and issues

From January to March 2019, EWOV received 85 embedded network cases

Billing, credit and transfer were the most common issues:

  • 44 embedded network cases were about billing — down 28% against the previous quarter  and most commonly about high bills, tariffs and concessions
  • 12 embedded network cases were about credit — up 33% against the previous quarter and most commonly about disconnection (imminent and actual)
  • 11 embedded network cases were about transfer — down 35% against the previous quarter and most commonly about objection and delay

Top Issues

Case Studies

Cases by Industry

Systemic Issues

Summary of systemic issue Investigations opened and closed

January to March 2019
 

  Energy Water LPG
Open/Under Investigation 1 2 0
Closed 3 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

January to March 2019

Usage charges left off bills

EWOV received five cases in which an energy retailer had billed for service charges only — usage charges were later backbilled. In each case, the customer's account had been activated, but there was no check on whether it was correctly linked to the meter in the energy retailer’s billing system. Because the retailer's system bills for both metered and unmetered supply, the missing usage charges weren't picked up. The retailer said it had introduced weekly reporting to identify and correct the omission. It also advised that a large-scale billing project, expected to be implemented in mid-2019, would introduce automated pre-billing validation for both metered and unmetered supply. SI/2018/39

Meter index reads wrongly combined

EWOV’s case handling revealed that an energy retailer was combining the index reads for all registers of a meter and presenting this on bills as a cumulative index read. This practice doesn't comply with clause 25 of the Energy Retail Code. The retailer agreed that each register’s index read should be accounted for on its bills. It said this would be addressed in billing system changes in July 2019. SI/2018/52

Actual data labelled as estimated

Eight cases to EWOV highlighted instances where an energy retailer’s billing wrongly labelled actual meter data as estimated. The retailer said the problem was due to its system classifying days as estimated if even a single 30-minute interval was estimated. Under the Energy Retail Code, if less than 48 hours of interval data in the billing period is estimated, the bill can be shown as actual. The retailer advised that it had addressed the billing system issue in August 2018 and, as result of the fix, its estimated billing had dropped to expected levels. SI/2018/21

Public submissions made by EWOV

Draft decision – Helping customers engage confidently in the retail energy market

Essential Services Commission (ESC)

In a series of ten draft decisions, the ESC proposed new rules for energy retailers' information disclosure and marketing. These rules are designed to ensure customers can more confidently assess and compare plans in the retail energy market. The ESC also proposed a new Victorian energy fact sheet, which will include a comparison tool to help customers compare plans easily, on the basis of the average yearly cost for a range of typical customers. The new fact sheet will be provided to customers at critical points in their decision-making process, and will also be referenced in marketing material. In its response, EWOV supported all ten of the ESC's draft decisions.

EWOV's submission online     

ESC's draft decision

Draft decision – Compliance and enforcement policy

Essential Services Commission (ESC)

EWOV's submission supported the ESC's appointment of a new Commissioner for compliance and enforcement, and its intention to adopt a risk-based, intelligence-led, outcomes-focused compliance and enforcement process. We expect these developments will see complaints to EWOV fall. However, we also observed that changing markets and new obligations on industry participants — for example through the General Exemption Order (covering embedded networks) and the Payment Difficulty Framework — will introduce new issues, which will require regulatory attention to ensure all customers are sufficiently protected.

EWOV's submission online     

ESC's draft decision

Glossary

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