Res Online 28 - August 2019

Number 28
August 2019

Res Online 28 - providing up-to-date information, statistics and analysis on energy and water complaints.

The Ombudsman's View

Payment difficulty framework starts to kick in

While it's early days, we're cautiously optimistic that the Payment difficulty framework introduced by the Essential Services Commission in January of this year is behind the falls, over the last two quarters, in energy billing and credit cases. While we're still adapting EWOV's processes to capture better information about cases related to this new framework, some additional early insights are provided in this issue.

Something which is of concern is that 72% of customers, who should have been made aware of advice and assistance under the framework, told us they weren't. We'll continue to ask customers this question, and recommend that all energy retailers revisit their processes to ensure that the necessary information is being provided to the customers who need it.

Further regulatory reforms

Since 1 July 2019, the Essential Services Commission has been implementing another series of reforms, this time to help energy customers find better energy deals:

  • Victorian Default Offer (VDO): a regulated price that has replaced most 'standing offers'
  • Best offer entitlement: a written notification on customer bills, advising the customer if the retailer has a better plan available and how much the customer could save by switching to that plan
  • Prior warning of bill changes: notification of changes at least five days before a price change, or the end of a customer's 'benefit period'
  • Clear advice entitlement: useful, clear advice for customers who want to switch to a better offer
  • Fact sheets for customers: standardised energy fact sheets with basic information that enables customers to easily compare their plan with others on the market.

We're reviewing EWOV's case handling processes for necessary associated changes, and tracking the customer experience as it presents to us. There's more information about the reforms on this page of our website

Other case studies in this issue

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.

Overview

Issues Watch

Early case insights on the Payment Difficulty Framework 

From April to June 2019, EWOV closed 251 electricity, gas and dual fuel credit Investigations lodged by residential customers.

Through conciliated outcomes from these Investigations, 145 customers received entitlements under the Payment difficulty framework (PDF). While 16 customers (11%) said they were aware of their PDF entitlements, 104 (72%) customers told us they weren't.

Of the 145 cases, 66 (46%) were primarily about disconnection; 41(28%) about debt collection/credit default listing; and 38 (26%) about payment difficulties.

Of the 145 customers who received PDF outcomes conciliated by EWOV, 87 were offered a payment plan. 15 customers received a payment plan under 'standard assistance' and 48 received a payment plan under 'tailored assistance'. Retailers offered a further 24 customers a payment plan of another type.

Top Issues

Case Studies

Cases by Industry

Systemic Issues

Summary of systemic issue Investigations opened and closed

April to June 2019

  Energy Water LPG
Open/Under Investigation 5 0 0
Closed 7 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

April to June 2019

Three phase meters affected by a manufacturing fault

Three cases received by EWOV highlighted faults in a certain type of three-phase meter. The distributor and meter manufacturer investigated and discovered a manufacturing fault in a small percentage of meters. The distributor developed and installed software, which enables it to analyse the data from all of its meters and identify the faulty ones. It advised that, because the fail rate of the meters was far below the fail rate required by the regulations before an entire meter population fails and needs to be removed from service, the meters could continue to be used. It resolved the issue by replacing the faulty meters, and reviewing and adjusting the meter data so affected customers could be rebilled. SI/2015/37 & SI/2017/7

Amending advices to customers around credit default listing

As part of the outcome of SI/2018/8 in June 2018, an energy retailer advised it would amend its payment arrangement letter (where relevant to default listing) to include a statement about credit default listing. This would advise customers that the retailer would retain its right to enter a default listing based on notices previously issued. We re-opened this systemic issue in May 2019, when we became aware (through nine cases to EWOV) that the energy retailer hadn't altered its payment arrangement letter. The retailer advised that it had taken a different approach. Rather than amending its payment arrangement letter, it had amended its payment plan cancellation letter to make it clear to customers that a default listing could occur. It had also included scripting for its representatives to use when setting up a payment plan, to make it clear that if the payments were not made a default listing could occur. SI/2018/8

Errors in meter read information after system update

Through our case handling, we became aware of errors in an energy distributor's issuing of meter reads. The distributor explained that, following a system change early in February 2019, where even a single read had an error, batches of 1,000 meter reads failed to issue. It said the problem was rectified in early in March 2019. The issue had been addressed with the retailers receiving the meter data, and the distributor had taken steps amend its system and its procedures to prevent the issue arising again. SI/2019/19

Disconnection before date on notices sent to 'occupier accounts'

Three cases received by EWOV highlighted that an energy retailer was issuing a reminder notice to 'occupier accounts', and then issuing a disconnection notice earlier than the date specified in the reminder notice. The customers at these properties were subsequently disconnected. The retailer said the problem arose during its transition to a new program, because a new spreadsheet formula wasn’t set up correctly. As a result, some disconnection notices were sent a day early. As soon as the error was identified, the formula was corrected. The retailer advised that the sites were on expired deemed contracts, so the wrongful disconnection payment didn't apply. SI/2018/50

Disconnection without warning of remote de-energisation

Four cases to EWOV highlighted that an energy retailer had disconnected customers whose property had a smart meter, after sending them a disconnection notice which didn't specify that supply de-energisation could occur remotely. We understand 850 customers were affected, and wrongful disconnection payments were provided. The retailer advised that it was working with the Essential Services Commission to provide appropriate remediation to affected customers. SI/2018/38

Billing delays arising from three different issues

EWOV received 36 complaints about delayed billing by an energy retailer. The delays were significantly more than for the same period the year before. The energy retailer advised that no delay was longer than nine months, so the backbilling was within the requirements of the Energy Retail Code. It said the delays were due to issues with a legacy billing system (to be corrected by 30 June 2019); a billing suspension due to a tariff change process (addressed through changed priority procedures); and errors during the field sales sign-up process where field agents offered plans to customers which were no longer available (addressed by honouring the offers made and retraining the field agents involved). SI/2018/59

Incorrect calculation of sewage disposal charges

Through EWOV's case handling we became aware that a water corporation’s billing system was calculating sewage disposal charges incorrectly, where the volume of recycled water usage exceeded 125 kL. We understand 415 customers were affected. The water corporation said it was manually intercepting bills for the affected areas and combining water usage volumes to calculate them correctly. It was also working on a solution to enable it to send bills automatically to customers with a combined usage of over 125 kL. It expected this solution to be implemented in the first quarter of 2019-20. SI/2019/9

Public submissions made by EWOV

Consequential amendments related to the Victorian Default Offer – Draft Decision

Essential Services Commission (ESC)

In EWOV's response to the Draft Decision, we supported the ESC's intention that consumers are given clear and honest information about the Victorian Default Offer (VDO), and that the VDO is included as a potential best offer option in best offer notifications and through the clear advice entitlement. Including some additional comments, we agreed with all three of the ESC's draft decisions:

  1. That the deemed best offer must be the lowest cost of a generally available plan or Victorian Default Offer applicable to the customer.
  2. That a retailer, under the clear advice entitlement, must communicate to a customer information about the retailer’s other applicable generally available plans and a Victorian default offer that it reasonably believes may be more suitable for the customer.
  3. Under the clear advice entitlement, a retailer is to communicate information about the availability of the Victorian Default Offer and how the customer may access the plan from the retailer.

EWOV's submission online 

ESC's draft decision

Energy Retail Code Changes to Support Family Violence Provisions for Retailers – Draft Decision

Essential Services Commission (ESC)

EWOV strongly supported the policy intent of the ESC's Draft Decision —''to provide customers affected by family violence with an entitlement to safe, supportive and flexible assistance from their energy retailer in managing their personal and financial security'' — and the requirement for retailers to have a family violence policy that's updated regularly. We also recommended effective training of retailer staff as central to achieving the cultural change that the new entitlements represent.

EWOV's submission online 

ESC's draft decision

 

Glossary

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