Table 4 – Energy complaint breakdown April to June 2022
||Number of complaints
||% total energy complaints
|Refer to higher level
Small businesses - post COVID
In November 2021 EWON released our Spotlight On Consumer and small business energy debt solutions, which examined the lack of consumer protections for small businesses and closed accounts.
After the final Australian Energy Regulator (AER) Statement of Expectations lifted on 25 October 2021, small business account holders were returned to the pre-pandemic framework of limited protections, despite operating in a newly precarious economic environment.
According to the AER, during the COVID-19 pandemic between March 2020 and March 2021 the combined debt for small business accounts increased by 42%, to $32 million. A March 2022 review of the most recent AER data shows that the debt level has not decreased.
In the past three years, small businesses have weathered the impacts of droughts, bushfires, floods, a recession, and the COVID-19 pandemic.1 Small businesses must now face an economic environment with increasing operational, wage and energy costs while trying to recover from the impact of COVID-19 and other unprecedented natural disasters.
This, combined with significant debt levels, highlights there is still a need for retailers and government to implement processes or regulations to ensure equitable protections. Without access to payment plans, small businesses are not in a strong negotiating position when requesting an affordable payment arrangement or time period to pay their debt. Sometimes this is the difference between a small business being able to continue operating or having to cease trading.
As a free, fair and independent service, EWON attempts to resolve complaints between small businesses and retailers by reaching a resolution that considers the circumstances of the customer but is also realistic and fair to the retailer. EWON always explains to customers that while we can try to assist with outcomes, retailers are not required to offer payment arrangements to small businesses.
A framework for small business customers experiencing hardship would enable better outcomes for customers. We continue to recommend immediate action including:
- The extension of hardship provisions under the National Energy Retail Law (NERL) and National Energy Retail Rules (NERR) to small business customers. When payment arrangements are offered by retailers they are often short and not sustainable. Extending these consumer protections would assist customers by levelling the playing field.
- The development of a Retail Code or Best Practice Guidelines for small business accounts. The AER Statement of Expectations were voluntary guidelines that retailers were willing to offer to small businesses. A mutually beneficial retailer code or best practice guidelines would encourage ongoing engagement and confidence from consumers.
Eight months after we published our Spotlight On, the case studies below highlight that businesses are still struggling with the effects of COVID-19 and other economic stressors. It is clear that now is the time to act and more must be done to address the increasing affordability challenges faced by small businesses.
Case Study: Business impacted by extreme weather disconnected for not paying bill
A customer contacted EWON in April 2022 as the electricity supply at his food business had been disconnected for non-payment. He advised that a fire at the property, closures during government lockdowns, floods and extreme weather had led him to close his business for more than six months during this time, the business accumulated arrears of approximately $20,000. He contacted the retailer to discuss his situation, but it advised the balance had to be paid in full.
The customer was seeking assistance with reconnection and an affordable payment arrangement to allow time for the business to recover and to seek a business loan to help pay the debt.
EWON contacted the retailer to obtain more information and discuss the outcome sought by the customer. The retailer advised that it would raise a service order to reconnect the electricity supply at the property as the customer had engaged with them.
The retailer offered a temporary payment arrangement of $200 per week and placed a hold on the account until the next bill was issued in July 2022, with the expectation that the customer would pay the full balance upon receipt of a business loan to pay the debt. The customer was happy with the outcome and advised that he would contact the retailer to further discuss payment of his account.
Case Study: Business faced with disconnection and unaffordable payment plan
A small business customer contacted EWON in March 2022 due to a field officer attending their property to disconnect the supply. The officer did not disconnect the supply, but the customer was concerned about loss of refrigerated and frozen stock. The customer advised us that without power, they would not be able to replace or recoup the cost of the stock, which would result in them having to close their business.
The customer advised that they had experienced staffing difficulties and a loss of business due to COVID-19, causing them to accumulate arrears of approximately $42,000 on their electricity account. The customer had contacted the retailer to discuss an affordable payment arrangement, but the retailer was seeking an immediate payment of $9,800 to avoid disconnection.
The customer advised that he was not able to make an upfront payment but had sought a temporary payment arrangement of $2,000 per week while he took steps to sell the supply address to raise funds for the business needs.
Retailers are not required to offer small businesses a payment arrangement, and this is further complicated when customers are on a ‘large market contract’ for businesses that consume larger volumes of energy. When EWON contacted the retailer, the retailer placed a hold on the account to stop any disconnection and allow the customer time to contact the retailer directly to further discuss a suitable payment arrangement.
Case Study: Small business avoids disconnection while waiting for government assistance
A customer contacted EWON in January 2022 after receiving a disconnection notice for the following week. He had $9,500 of arrears on his electricity account and said his business had been impacted by the COVID-19 restrictions and lockdowns. The customer had contacted the retailer but was advised that he needed to pay $4,800 to avoid disconnection, an amount he couldn’t afford.
The customer also advised the retailer that he had applied for a government grant for businesses, however due to an administrative error the application for the grant had been filled out incorrectly. While the mistake had subsequently been corrected, the customer sought a hold on the disconnection to allow time for the funds from the grant to be received.
The customer advised EWON that he had not made any payments towards his account and was finding the situation stressful. He was able to afford a payment arrangement of $100 per week until he received the additional funds from the grant.
During our investigation, the retailer advised EWON that the account had been established in March 2021, but it had not received any payment towards the account from the customer. After further discussion, the retailer agreed to cancel the disconnection order and offered to place a hold on the account for one month to allow time for the customer to receive the funds.
EWON discussed the importance of ongoing payments with the customer. The customer advised that they had made a payment of $100 towards the account and would continue to make payments of $100 per week until the additional funds were received.
Case Study: Faulty meter results in high estimated bill
A customer’s small business was closed during the 2021 COVID-19 lockdowns. She had been receiving estimated bills since June 2021, which she was advised was due to access issues to the meter. When she disputed the bills with her retailer, a field officer was sent to read her meter and advised that it was faulty.
The customer received high estimated bills for the period June 2021 to December 2021, based on historical consumption at the property, leading to arrears of $6,900. She disputed these bills with the retailer, arguing that her business had not been operating during that time, and contacted EWON for assistance as she had not been able to resolve the issue with the retailer directly.
The retailer advised EWON that it had received a meter fault notification in October 2021. However, the meter could not be replaced as the customer could not turn the power off during business hours. Furthermore, the meter was shared with a second business. The retailer also advised that a defect notice had been issued to the customer and the meter was successfully exchanged in January 2022.
The retailer did not consider that it had caused the delay in the meter exchange and felt the billing was appropriate as it was based on historical data. Nonetheless, it re-billed the customer’s account for the period June 2021 to March 2022 based on amended billing data from the distributor. The retailer did not bill the customer for any consumption for 30 June 2021 to 13 October 2021, the period the customer advised she was not trading due to government restrictions. This reduced the amount owing on the account to $2,500. The customer was satisfied with this outcome and thanked EWON for our assistance.
On 1 October 2020, the Electricity Supply (General) Regulation 2014 was amended to allow metering providers and authorised retailers to remotely de-energise and re-energise smart meters at premises for small business customers in NSW. Nearly two years later, remote disconnections and reconnections are not yet widespread, partly because the roll out of smart meters in NSW has been slower than anticipated since the introduction of Power of Choice from 1 December 2017.
According to the Australian Energy Market Commission (AEMC) about 25% of premises in NSW had a smart meter as at September 2021. The AEMC commenced a review in December 2020 to determine whether Power of Choice reforms are meeting expectations and whether changes are required to improve the efficiency and effectiveness of the regulatory framework for metering services. The review was paused in November 2021 due to other AEMC priorities but has since recommenced, with a draft report expected in September 2022 following previous public consultations. If the AEMC’s review leads to changes that accelerate the smart meter roll out, remote de-energisation and re-energisation are likely to become more common.
Metering providers and authorised retailers are not automatically allowed to request or undertake remote de-energisation and re-energisation, as they are required to have an approved Safety Management Plan as per the Gas and Electricity (Consumer Safety) Regulation 2018. Those with approved Safety Management Plans are listed on the NSW Fair Trading website, and the number is slowly increasing.
As the smart meter roll out continues and more providers register Safety Management Plans, EWON is seeing more complaints related to remote reconnection, with issues including:
- breakdowns in business-to-business processes such as the identification of remote disconnections in the national electricity database
- retailer confusion between traditional distributor and new remote processes
- customer uncertainty about time-frames and what they need to do to prepare for re-energisation.
EWON is monitoring complaints and will refer any emerging trends we see to retailers, regulators and the NSW Government.
Case Study: Remote electricity reconnection delayed
A customer moved into a unit that had no power connected. He contacted a few different retailers but none were able to open an account and reconnect the supply. The customer then contacted the retailer which held the billing rights on 1 April 2022 and established an account. The retailer advised that the electricity supply would be reconnected the following day, but reconnection did not occur.
The customer followed up with the retailer daily but still had no supply several days later. He paid for accommodation elsewhere in the meantime and was therefore incurring expenses while the power was disconnected. On 4 April 2022 the electricity supply was still not reconnected, so he contacted EWON for assistance.
The retailer advised that the site had been remotely de-energised when the previous occupant moved out. When the customer established an account, the retailer incorrectly raised a physical reconnection request with the distributor instead of a remote reconnection request with the metering provider.
EWON’s review found that the disconnection had not been correctly identified as a remote disconnection by the metering provider in the national electricity database, which had contributed to the confusion. The retailer correctly arranged a remote re-energisation and power was restored on 4 April 2022.
The customer agreed to submit a claim directly to the retailer for out-of-pocket expenses. EWON advised the customer that he could return to EWON for further advice and assistance if he was not satisfied with the claim outcome.
Case Study: Delays in remote reconnection after transfer in error
A customer moved into a rental property and established an account with his preferred retailer (‘Retailer A’). His landlord lived in a different property on the same block. The customer paid bills from his preferred retailer for 18 months, but his electricity supply was disconnected on 11 April 2022. He contacted Retailer A but it advised that it could not arrange for the supply to be reconnected as it did not request the disconnection. He spoke to the distributor, which advised him that a different retailer (‘Retailer B’) had disconnected the site remotely.
In an attempt to have supply reconnected, the customer established an account with a third retailer (‘Retailer C’). Supply was still not reconnected, and he contacted EWON for assistance on 19 April 2022, aiming to understand whether Retailer A had been charging him for the incorrect meter for 18 months.
EWON’s review identified that the customer’s address and the landlord’s address were very similar in the national electricity database. We also found that Retailer A had established an account for the incorrect meter number and that Retailer B had remotely de-energised the customer’s correct meter for vacant consumption. When trying to arrange an account and reconnection of supply for the correct meter number, Retailer A incorrectly liaised with the distributor instead of following remote reconnection processes. Retailer A had a Safety Management Plan and should have been able to arrange remote reconnection, and it was unclear why this did not occur. The customer opened an account with Retailer C for the correct meter number on 16 April 2022. However, Retailer C also did not follow the correct remote reconnection process and supply was not remotely reconnected until 19 April 2022.
Retailer A reversed all incorrect charges of $1,700 and applied a customer service credit of $100 on the basis that it did not confirm the customer’s correct meter number when it established the account. Retailer C applied a customer service credit of $250 to the customer’s new account in recognition of the reconnection delays. EWON’s review did not identify any incorrect actions by Retailer B.
The customer also agreed to liaise with his landlord to provide council rates notices to update the two addresses in the national electricity database to help avoid further transfer error issues.
Case Study: Mains switch status delays remote reconnection
A customer moved into a property on 2 May 2022, shortly after a family member had moved out and closed his account. There was no power at the property when she moved in. The customer contacted EWON on 3 May 2022 as she was having trouble getting the electricity supply reconnected. She thought this was because the property was classified as a business but was actually a residential property.
The retailer advised EWON that the power had been remotely disconnected on 29 April 2022 when the previous account holder moved out. It explained that the delay in reconnection was because it had not confirmed with the customer that the main switch(es) were off, a requirement of both its Safety Management Plan and the metering provider’s Safety Management Plan. Once the customer confirmed she had turned the main switches off, the remote reconnection was completed on 4 May 2022.
The customer accepted the retailer’s offer to provide a goodwill credit of $450 for the delay in reconnection. The customer and retailer agreed to liaise directly about changing the classification from business to residential. The customer was invited to return to EWON if she was not satisfied with the outcome of this process.