Res Online 31 - May 2020

Number 31
May 2020

Res Online 31 - providing up-to-date information, statistics and analysis on energy and water complaints.

The Ombudsman's View

January to March 2020

Case issues and trends – clear signs of the times

Overall, EWOV cases for January to March 2020 were down — down 11% from the October to December 2019 quarter and down 18% against the January to March 2019 quarter.

In this context, a 5% quarterly increase in electricity credit cases — driven by a 19% increase in electricity cases about payment difficulties — is of concern. Fuelling further concern is that those case increases largely pre-date the wide-ranging societal changes delivered by COVID-19 measures since mid-March.

In the 'Issues Watch' section of this edition of Res Online, we draw on our case data to look at assistance to customers under the Payment Difficulty Framework and trends that are starting to emerge from the COVID-19 developments:  

  • As our January to March 2020 Payment Difficulty Framework data shows, many customers are having trouble paying their energy bills and, as a result, building up energy arrears. Given the 357 customers whose cases we draw on in our analysis are those whose complaint made it all the way to an EWOV Investigation — not the customers whose complaint was addressed under the Payment Difficulty Framework by their energy retailer after EWOV referral, or without EWOV's intervention — it has to be expected that there are many more customers facing some level of payment difficulty.
  • In mid-March 2020 we started tracking EWOV's COVID-19 related cases. While these cases remain low, some financial hardship and affordability trends are emerging — especially around high bills, payment difficulties and debt collection. Some early insights into these cases are also included in the 'Issues Watch' section.

While things are a little quieter at EWOV at present, we expect cases to return to usual levels once customers adjust to their changed social and working conditions — and then rise above usual levels as financial stress grows in the community over the next few months. Financial hardship and affordability issues loom large.

EWOV is not alone in its concerns. We note that the Essential Services Commission has recently put Victorian energy companies on notice that it's closely watching how they support customers at this time — highlighting in particular, retailer obligations under the Payment Difficulty Framework and recently introduced entitlements for those customers affected by family violence.

Case studies highlighting EWOV's Investigation processes

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

Payment Difficulty Framework

From the 1,048 electricity, gas and dual fuel Investigations EWOV closed in the first three months of 2020, 357 customers (34%) received assistance under the Payment Difficulty Framework (PDF).

  • All 357 were residential customers with arrears of $55 or more on an open electricity, gas or dual fuel account.
  • Billing was the main issue for 196 of them (55%). Credit was the main issue for 130 of them (36%). The remainder of cases comprised issues including provision and transfer.
  • Some customers who were eligible for PDF assistance ended up not needing it — mainly because the retailer offered to waive their debt or made a customer service payment equal to the debt (thus clearing it).
  • In 11 (1%) of the 1,048 overall cases the customer self-disclosed as being in a family violence situation. As customers can be reluctant to disclose their situation, we expect the number of customers experiencing family violence is higher than this.

183 customers (51%) were offered a tailored assistance payment plan by their energy retailer.

  • 109 customers had their arrears put on hold for a minimum of 6 months — allowing them to pay below their consumption and build their capacity to increase payments, or to reduce consumption, or both. Credit was the main issue for 63 of these customers (58%). Billing was the main issue for 42 (39%) of them. In a positive indication that retailers are using practical assistance measures and providing genuine assistance to help customers achieve sustainable energy use and costs, at least 89 of the 109 customers (82%) were offered practical assistance in the form of tariff information, progress review and/or energy use reduction.
  • 63 customers went onto a payment plan for both ongoing consumption and arrears, with their arrears to be paid within 2 years. Billing was the main issue for 37 of these customers (59%). Credit was the main issue for 19 (30%) of them.
  • 11 customers went onto a payment plan for both ongoing consumption and arrears, with their arrears to be paid over more than 2 years. For 9 of these customers (82%) credit was the main issue. For 2 (18%) of them, billing was the main issue.
  • 184 customers (52%) were advised about government assistance. The accounts of these customers were checked to ensure they were receiving all applicable concessions and, if appropriate, were sent the form for a Utility Relief Grant.

The COVID-19 factor 

In March 2020, COVID-19 began disrupting life for consumers and businesses. By late March, just under a quarter of all customers contacting us were mentioning COVID-19.

Some trends have emerged — in billing, around high bills, refunds and backbills — in credit, around payment difficulties and debt collection. High bills and credit issues are traditionally indicative of financial difficulty — we expect cases in these categories to increase as financial hardship becomes more widespread in the wake of the COVID-19 disruptions.

We’re also seeing a more unusual growth in supply cases related to planned outages — we think this is due to the large number of people presently working from home, who find themselves inconvenienced by supply interruptions during the day, when these would not usually pose a problem.

Early insights on COVID-19 cases — what some customers have told EWOV 

  • A customer awaiting advice about the Utility Relief Grant he applied for in December 2019 received warning of imminent electricity disconnection in contrast to regulatory requirements. He owed $882.27 and he’d missed two payments on his plan. His housemate had lost her job due to COVID-19. Following an Assisted Referral, the customer told us he’d learnt that grant approval hadn’t been received due to delays at the Department of Health and Human Services (DHHS). He said his retailer had extended his pay-by date to mid-May 2020. However, he’d also been told that collection activity would commence if he didn’t pay by then. He’d also received a pay-on-time credit of $330.73. 2020/4884
  • A customer, renting a property within an embedded network, had been stood down due to COVID-19. She said she had no income and needed to apply for a Utility Relief Grant. Her embedded network retailer had told her to contact DHHS directly, saying it is up to DHHS to determine whether a customer in an embedded network meets the relevant ‘hardship triggers’ for a grant. The customer said she’d tried for more than a week to get through to DHHS and was concerned her debt was growing. Following an Assisted Referral, the embedded network retailer advised that the customer was still to hear about her eligibility for the grant, but her account had been put on hold for six months. 2020/4885
  • Out of work due to COVID-19 and separated from her partner due to domestic violence, a customer owed $671.48 to her gas retailer. She’d applied for a Utility Relief Grant in 2019, to help her reduce her arrears, but the grant hadn’t come through yet. She said the gas retailer had told her no bill reduction waiver was available and she’d also need to re-submit the grant form. We raised an Assisted Referral for the customer to a higher-level contact within her gas retailer. We’ve followed up and are awaiting advice from the customer about whether our referral has resolved her concerns. 2020/4793
  • In sudden financial hardship, a customer asked his water corporation whether he could pay the $70 he owed in two instalments. He said his request was declined and the water corporation sought payment in full immediately. We raised an Assisted Referral for the customer to a higher level contact within his water corporation. We’ve followed up and are awaiting advice from the customer about whether our referral has resolved her concerns. 2020/4834

Top Issues

Case Studies

Cases by Industry

Systemic Issues

Summary of systemic issue Investigations opened and closed

January to March 2020

  Energy Water LPG
Registered 8 1 4
Closed 10 1 2

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 2020

Energy, natural gas and LPG

Rates unclear in contract information

Our case handling highlighted that an energy retailer's contract information was unclear about how its rates would be charged. The retailer subsequently amended the information to communicate this clearly. SI/2018/48 

Retailer unable to view new bills

An energy retailer informed us that because of a billing system upgrade, it couldn't view the new bills it had sent to customers. The retailer subsequently advised it had fixed the problem in December 2019. SI/2019/52

Opening meter readings shown on bills as estimated

We became aware of a potential systemic issue when a customer (an EWOV team member) found the meter reading on her first gas bill showed as estimated, when she knew it was actual. The gas retailer advised it was aware of the problem, which was due to how its billing system was processing the opening read information received from gas distributors. It subsequently advised the problem had been fixed in December 2019, ensuring that opening meter readings are correctly recorded on bills as actual. SI/2019/43

Emails addressed to wrong customers

An energy retailer alerted us that in the process of sending a price change notification email to customers, account details became mixed up and the email showed a different customer’s first name, address and account number. We understand 5,569 customers were affected. We received a small number of related cases. The retailer said it had addressed the error with affected customers the same day it happened. It also advised that it has introduced manual checking to ensure the account details in spreadsheets match those in its systems. SI/2019/51

Delays in sending grant application forms to customers

Our case handling revealed delays in sending Utility Relief Grant application forms to customers, as a result of issues with the Department of Health and Human Services' (DHHS) online portal. Two energy retailers told us they had taken the delay up with DHHS. We understand the portal has been updated, however delays are still occurring, with some movement on outstanding applications in recent weeks. Two systemic issues: SI/2019/46 and SI/2019/49

Wrong information in online app

Our case handling highlighted several issues with an energy retailer’s online app. Daylight savings wasn't accounted for in the usage representation; rates weren't correctly reflected in estimations of the dollar value of usage displayed; and the daily usage didn't match the total of the individual 30 minute intervals displayed for that day. The retailer subsequently advised that it had addressed each of these problems. SI/2019/18

Bills missing start and end index reads

Through our case handling we became aware that an energy retailer’s electricity bills didn't display start and end index reads. The retailer subsequently advised that it had corrected this. SI/2020/1

Water in gas service lines

Our case handling revealed an issue with water entering the energy distributor’s gas service lines in a particular street. We understand about 50 customers were affected by outages over the past year. The gas distributor advised us it was planning to install a small high-pressure network extension and renew the mains in the street. It said its actions in responding to the reported gas supply incidents demonstrated it had used 'reasonable endeavours' under the Gas Distribution System Code to meet the Guaranteed Service Levels. SI/2019/45

Double billing and incorrect service charges

Our case handling highlighted that an energy retailer's recent bills double billed for the same period at two different rates, and billed service charges for a period longer than the billing period. We understand 1,159 customers were affected. The energy retailer advised that the issue arose when duplicate customer inventories were loaded into its system as part of changes made in July 2019. It said the problem was fixed in October 2019 for all affected accounts, and extra checks put in place to prevent it happening again. SI/2020/7

Invoice for bills already paid

Through our case handling we identified that an LPG retailer was sending invoices to customers for bills they'd paid. The LPG retailer said the error came about through a combination of data transfer issues between its computer platforms and procedural errors by contact centre staff. It subsequently advised that system fixes in November 2019 and January 2020 resolved the data transfer issues; the billing of affected customers had been corrected; and new processes for contact centre staff would promote adherence and reduce errors. SI/2019/33

Water

Compensation claims from water customers

Our case handling highlighted problems after a water corporation's main burst and water leaked into a gas distributor's mains. Several customers of the water corporation contacted EWOV seeking compensation for damage and loss. The water corporation advised that its offer to all affected customers would be to pay the customer's excess for any successful claim made on their own insurance.  SI/2019/48

Incorrect charging of tenants for water usage

Our case handling revealed that a water corporation was charging 580 tenants for usage that wasn't measured by a dedicated check meter. This isn't permitted under the Water Act 1989. The Department of Environment, Land, Water and Planning (DELWP) is aware of and monitoring the issue. It has advised us that, in these situations, the water corporation will now bill the landlord not the tenant. It noted that between 2014 and 2018 tenants received a $100 water efficiency rebate on their first bill of the financial year, which would have reduced the effect of any usage charges billed incorrectly. SI/2018/46

Public submissions made by EWOV

January to March 2020

Electricity Distribution Code Review – Technical Standards – Draft Decision

Essential Services Commission (ESC)

Our response to this draft decision built on our submission to the Electricity Distribution Code Review Issues Paper. Among other things, we supported the ESC's decision to adopt the Australian Standard rather than taking a 'best endeavours' approach to new voltage standards; its proposal to retain a modified version of the Voltage Variation Compensation Guideline (thus recognising the guideline's importance in ensuring customers receive adequate compensation for damage); and its decision that technical standards be updated in line with industry best practice.

EWOV's submission online 

Consumer protections in an evolving market: New energy products and services – 2020 Retail Energy Competition Review – Issues Paper 1

Australian Energy Market Commission (AEMC)

In our response to this issues paper we focused on questions where recent Victorian experience would be especially informative, or that we considered highly relevant to the issue of effective dispute resolution in a future energy system. These included risk of consumer detriment in relation to new energy products and services; the elements of the energy market that are useful to define the scope of the energy specific consumer framework; the characteristics of vulnerable consumers; whether additional protections are required to prevent unfair practices; and the effects of different redress mechanisms.

EWOV's submission online 

AEMC's issues paper

Australian Energy Regulator (AER) Compliance and Enforcement Priorities – 2020-21

Australian Energy Regulator (AER)

We recommended that the AER make the Default Market Offer (DMO), the Customer Hardship Policy Guidelines and Embedded Networks priority areas for 2020-21. We also recommended that the AER monitor developments in new energy products and services markets; leverage the data of all Ombudsman schemes to aid its compliance and enforcement work; and remain flexible and nimble in its approach.

EWOV's submission online 

AER's 2020-21 priorities

Changing the back-billing rules for retail energy customers – Draft Decision

Essential Services Commission (ESC)

We observed that the Draft Decision succinctly outlined the background and rationale for the proposed changes to backbilling rules, and that we expect the proposed reforms will incentivise energy companies to tighten their billing systems to reduce their exposure to backbilling errors. In particular we supported the proposed limit of four months on retailer recovery of undercharges unless the undercharging is caused by the customer; and the proposal that distributors not be permitted to recover charges from a retailer if the retailer is unable to recover those charges from a customer.

EWOV's submission online 

ESC's draft decision

 

Glossary

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