1 August 2011

RE: Discussion Paper - Extending the Jurisdiction of the Energy and Water Ombudsman (Victoria).

Dear Erin,

I am writing in response to your recent discussion paper concerning the possible membership of exempt bodies to EWOV.

Colonial First State (CFS) owns and operates eight major shopping centres within Victoria and on-sells electricity to over 1,000 tenants within these centres. CFS engages specialist third party embedded network operators / consultants to help manage their on-selling operations. This strategy ensures CFS provides a low cost, high quality of service in relation to the electricity on-selling. As such, CFS attracts a sign-up rate of more than 97% within its centres and no tenant has ever elected to buy from a licensed retailer after being supplied by us.

Energy on-selling is an incidental service that we provide our tenants. Our core business function is retail leasing which has highly stringent rules and regulations concerning dispute resolution. Whilst these regulations do not cover energy onselling, CFS treats all disputes with the same level of precedence. Thus any complaints we have encountered relating to energy on-selling have been handled professionally and expediently. No tenant has ever felt the need to escalate a dispute because of such.

Further affirming this point is the fact that to our knowledge, no embedded network customer within Victoria has ever taken a case to VCAT that concems electricity onselling. The case cited by DPI in the discussion paper relates to a well documented case concerning the un-metered supply of gas. The ESC does not provide exemptions for the on-selling of gas (Pentridge Piazza is the exception) and so this case could have only been resolved in VCAT under general points of law. That is, EWOV would have been unable to make any ruling as this case would have been outside their jurisdiction even if the exempt body was a member of EWOV.

In order for the DPI to truly make an educated and informed assessment as to how many customers have disputes within embedded networks, it should have conferred with EWOV. Whilst EWOV cannot handle cases concerning customers within embedded networks, it should at least have a log of calls received relating to such.

The numbers of calls made could then be assessed relative to the total number of embedded network customers and this statistic compared to industry standards. This would enable the DPI to best assess how important an issue this is for customers within embedded networks and also help determine what possible mechanisms would best suit exempt bodies.

Based on its own experience, CFS believes the current legal protections in place between exempt bodies and their customers are adequate. VCAT provides a low cost dispute mechanism for consumers unable to resolve issues with an exempt body. Indeed there exists no evidence to the contrary on this point.

Any additional costs imposed on exempt bodies are likely to be reflected within the energy rates offered to customers within embedded networks. Hence forcing exempt bodies to become members of EWOV is likely to erode any cost benefit to those consumers.

Kind Regards,

Chris Greenall

Assistant National Operations Manager

Colonial First State Global Asset Management