Need to know
- Complaints about estimated energy bills are on the rise
- Regulators say it's important to double-check and query bills that don't seem correct
- Energy companies should make it easy to get an inaccurate bill rectified
When Peter received his electricity bill in the middle of 2021, it was almost double what it usually was. He challenged the bill with his retailer, AGL, and was told that it was only an estimated bill. The amount he owed was reduced by $130.
Peter is glad he got his bill reduced, but the experience has left him wondering what happens to thousands of other people who don't query their bills, and simply pay up.
"How many others get a bill and don't question it and just pay it?" he says.
Peter's experience is more common than you might think.
According to a nationally representative survey conducted by CHOICE in January of around 1000 people, 8% of respondents say they've been overcharged on a bill in the last 12 months.
Of those, around three quarters (74%) queried their bill with their retailer, and 38% say it was difficult or very difficult to get their bill rectified.
Why energy retailers estimate bills
Unless you have a smart meter, your energy retailer is meant to send someone (sometimes a subcontractor) to your property to read your meter so they can provide you with an accurate energy bill. But in cases where they don't send someone – for example, during COVID lockdown periods – they estimate your usage.
If your bill is an estimate, your retailer is legally obliged to tell you on the bill itself
The energy retailer bases their estimate on a number of factors, such as average usage for similarly sized households, or historical data on how much energy you used during the same period the previous year.
If your bill is an estimate, your retailer is legally obliged to tell you on the bill itself. If you challenge the bill, they may ask you to send in a photo of the meter, or they may send someone to your home to read the meter. They will then rectify your bill if necessary.
The problem with estimated billing
Clare Savage, chair of the Australian Energy Regulator (AER), says during the COVID lockdowns and the Omicron surge in December and January, estimated usage became more common, and that may have led to an increase in inaccurate billing.
And while it would be fair to assume that overestimating use, and therefore overcharging, is the main issue that customers face, Savage says underestimating can also be a problem.
"Because when the meter is fixed, or when they get the proper reading done, that undercharging is then sent to them as a catch-up bill and that can be really hard for customers in terms of managing and budgeting for their bills," says Savage. "They should be talking to their retailer at that point about getting a payment plan if necessary." she adds.
Complaints about estimated energy bills on the rise
Janine Young, the Energy and Water Ombudsman of New South Wales, says complaints about estimated energy bills are up from 10.4% of all complaints pre-COVID to 13.5% of all complaints in the first quarter of 2022.
She tells CHOICE it's important that people get accurate bills so they can make informed decisions about their energy use.
Billing complaints make up around 60% of all complaints handled by the NSW Energy Ombudsman
"Getting a high bill makes you think about your energy usage, and you might change your habits, but getting a low bill means you've got no signals to say 'actually, I need to put more away for my next energy bill'. So when you get the catch-up bill, it can be a really big financial blow for many customers," she says.
Overall billing complaints make up around 60% of all complaints handled by the NSW Energy Ombudsman.
Known complaints just the tip of the iceberg
Douglas McCloskey, an expert on energy-related issues for the Public Interest Advocacy Centre, says the number of complaints that make it to the Ombudsman are a small fraction of the number of people who've been wrongly billed.
"The fact that so few make it to the Energy and Water Ombudsman means that retailers have much less incentive to solve systemic issues that may be causing ongoing billing issues," he tells CHOICE.
Retailer's mistake becomes customer's problem
Savage says retailers should make it simple to challenge a bill. But in reality that isn't always the case.
Sean, who lives in Sydney, says his experience with AGL since receiving a $240 gas bill in May 2021 has been frustrating. He challenged the bill, which is usually between $65 and $80, and was told that he didn't owe the money as the meter was faulty.
They keep putting me on payment plans for money I don't oweSean, AGL customer from Sydney
But on multiple occasions since then, AGL called and demanded that he pay the original bill. On two occasions he had no other option but to agree to a payment plan, which he was later able to get removed by the company.
"I don't owe the money, and everyone keeps telling me I don't owe the money, but they keep chasing me. Every three months they keep chasing me. I've had a terrible experience. They keep putting me on payment plans for money I don't owe," he tells CHOICE.
A spokesperson for AGL says that customers who had questions about their bills should contact them immediately.
AGL is one of several energy retailers who have recently faced enforcement action from the regulator
"We encourage customers who have questions or concerns regarding their billing to contact us via our chat, our online portal or phone to discuss. There are a range of factors that can result in customers receiving an estimated read and once an actual read is registered, billing is adjusted accordingly. AGL customers are also able to provide a meter read to us directly if they are concerned by an estimated read on their bill," the spokesperson says.
AGL is one of several energy retailers who have recently faced enforcement action from the regulator over energy meter issues.
AGL was fined $160,000 by the AER in January last year for eight penalties of failing to fix faulty energy meters, after being alerted to them by customers. The regulator said in some cases the meter went unfixed for over 500 days.
Retailers should take more responsibility
McCloskey says it isn't fair or reasonable that the onus is on the customer to monitor and enforce the good practice and accuracy of retailers when it comes to billing.
"There are rules that are supposed to ensure that all efforts are made to get true meter readings and accurate, timely billing. In practice the rules are not applied consistently and strongly enough to make sure people get the service they should," he says.
"Energy is an essential service and people just want to be able to pay a fair price and be billed for the power they actually used. This is the only job of retailers and if they can't do it consistently people are reasonable in asking, what are they for?" he adds.