16 May 2013
Mr Andrew Chow
Director - Water
Water Team
Essential Services Commission
Level 37, 2 Lonsdale Street
MELBOURNE VIC 3000
By email: [email protected]
Re: Essential Services Commission (ESC)’s 2013, Price Review 2013: Greater Metropolitan
Water Businesses – Draft Decision, Volume I, April
Dear Mr Chow
Thank you for the opportunity to comment on the ESC’s 2013, Price Review 2013: Greater
Metropolitan Water Businesses – Draft Decision, Volume I, April (the Price Review).
As an industry-based external dispute resolution scheme, the Energy and Water Ombudsman
(Victoria) (EWOV) provides alternative dispute resolution services to Victorian energy and water
customers by receiving, investigating and facilitating the resolution of complaints.
EWOV’s jurisdiction does not extend to the setting of prices or tariffs. Therefore, we will not
make comments in relation to the draft prices in the Price Review. However, EWOV considers it
relevant that the ESC is made aware of EWOV’s experience in dealing with customer complaints
about affordability and related issues, particularly given the impact of the Price Review.
Customer Affordability and Case Growth
The proposed price increases will have a significant impact on customer affordability. EWOV
experienced a 46% growth in the number of water cases between the 2007-08 and 2011-12
financial years, from 1,562 in 2007-08 to 2,282 in 2012-131. This includes an increase over that
five-year period in the following:
 credit cases: 96%
 high bill cases: 251%.
1
Data taken from Figure 26 on page 44 of EWOV’s 2012 Annual Report
The graph below illustrates the increase in water cases overall, credit-related cases and high
billing cases each financial year since 2007-08.
Additionally, between 1 July 2012 and 30 April 2013, EWOV has received 1,876 water cases,
indicating that the number of water cases we will receive for the 2012-13 financial year will not
be trending backwards. Between 1 July 2012 and 30 April 2013, EWOV received the following
cases for the metropolitan water corporations and Western Water:


168 credit-related water cases
1,038 billing cases, of which 488 related to high water bills.
The steady increase in credit-related water cases since 2007-08 demonstrates that customer
affordability and financial hardship are increasingly areas of concern and drivers of complaints
for Victorian water customers. The 96% growth in credit cases correlates with the price
increases over the same period. Tariffs for the metropolitan water corporations (not including
Western Water) have increased by an average of 82% between 2007-08 and 2012-132.
2
Using data from Table 3 on page 5 of Essential Services Commission 2009, Metropolitan Melbourne Water Price
Review 2008-09—Final Decision, June.
2
EWOV comments on Essential Services Commission 2013, Price Review 2013: Greater Metropolitan
Water Businesses — Draft Decision, Volume I, April
EWOV’s Experience
EWOV’s expertise in handling these types of cases suggests that there are opportunities for
water corporations to:







improve the early identification of customers in hardship
have early conversations with customers to discuss affordability and payment options
before hardship becomes a long-term issue
ensure front line staff are equipped and trained to deal with customers who are
experiencing financial difficulty and/or have special customer circumstances
strengthen relationships with community organisations
ensure that eligible customers receive concessions and grants (where applicable)
enhance the exchange of information between their credit and hardship departments
improve their record keeping to ensure that the details of customer contacts and
assistance provided to customers is available3.
EWOV recognises the work being done by the water industry vulnerable customer taskforce,
comprising senior level representatives from Melbourne’s metropolitan water corporations and
three key social service organisations.
EWOV’s experience is that customers often do not self-identify their financial hardship
situation. Based on EWOV’s experience in handling water cases, credit cases, water hardship
guaranteed service level (GSL) cases and energy Wrongful Disconnection Payment (WDP)
investigations, it is important that water corporation credit and hardship departments
strengthen information exchange to ensure hardship customers are identified in an appropriate
and timely way and do not ‘slip through the cracks’.
In Victoria, water corporations and energy companies need to undertake certain additional
steps before they disconnect or restrict a hardship customer’s supply to comply with the WDP
and water hardship GSL requirements. To assist in ascertaining if the customer is in hardship,
EWOV uses all or some of following list of indicators to check for hardship that is not selfidentified:









sporadic or no payments
previous actual restriction of supply
concession card holder
paying via Centrepay
current or previous participation in a hardship program
high levels of debt with an energy company or water corporation
ongoing consumption exceeds payments
failed instalment/payment plans
an application for the Utility Relief Grant Scheme (URGS).
3
EWOV notes that this is particularly important for any restriction/legal collection activity to ensure that it was
compliant with the requirements for the Water Hardship Related Guaranteed Service Level (GSL) scheme.
3
EWOV comments on Essential Services Commission 2013, Price Review 2013: Greater Metropolitan
Water Businesses — Draft Decision, Volume I, April
It may be a single indicator or a mix of indicators that help the energy company, water
corporation or EWOV confirm if a customer is experiencing financial hardship. We encourage
water corporations to adapt a comprehensive and uniform checklist to help identify hardship
customers.
Additional Hardship Assistance
EWOV supports the ESC’s draft decision for the provision of an additional $5 million for the
hardship programs for City West Water, South East Water and Yarra Valley Water. EWOV
queries if the provision of additional funds will also extend to Western Water.
EWOV believes that a mid-year review to check on how those extra funds are being used would
help ensure that Victorian water customers who are more vulnerable to price increases are
receiving assistance. This would also provide an opportunity to check if further funds are
needed to adequately meet the potential increase of customers experiencing payment
difficulties.
We trust the above comments are helpful. Should you require further information or have any
queries please contact Chris Stuart-Walker, Research and Communications Officer, on
(03) 8672 4252 or at [email protected].
Yours sincerely
Cynthia Gebert
Energy and Water Ombudsman (Victoria)
4
EWOV comments on Essential Services Commission 2013, Price Review 2013: Greater Metropolitan
Water Businesses — Draft Decision, Volume I, April