jemena-logo-v22 August 2011

RE: Discussion Paper – Extending the jurisdiction of the Energy and Water Ombudsman (Victoria)

Dear Erin

Jemena Electricity Networks (JEN) appreciates the opportunity to comment on the Department of Primary Industries (DPI) discussion paper on extending the jurisdiction of the Energy and Water Ombudsman (EWOV) of Victoria.

In summary, our key messages are:

  • JEN would only support exempt customers having access to the EWOV resolution mechanism, if the cost of taking on these disputes is not spread across the other fee paying scheme participants.
  • JEN believes enforcement of a requirement for exempt bodies to become members of the EWOV scheme and payment of fees will be problematic.
  • Exempt customers should be encouraged to have their disputes heard by the Victorian Civil and Administration Tribunal (VCAT).
  • Should EWOV's jurisdiction be extended to include certain classes of exempt customers, JEN believes it should be restricted to customers in caravan parks and rooming houses. Because of the difficultly in recovering the dispute resolution costs from these exempt bodies, JEN considers the Victorian Government should pay the incremental cost of extending the scheme.

JEN's detailed response to the DPI's discussion paper is set out in Attachment 1.

If you wish to discuss the submission, please contact me on (03) 9854 9442 or by email siva.moorthy@jemena.com.au.

Yours sincerely

Siva Moorthy

Manager Network Regulation

Attachment 1

Discussion Paper – Extending the jurisdiction of the Energy and Water Ombudsman (Victoria)

For the purposes of this discussion, exempt bodies include, but are not limited to, caravan parks, rooming houses, retirement villages, apartment buildings and shopping centres.

In deciding the appropriate body to assist in the resolution of energy complaints between exempt bodies and their customers, the first consideration should be which of the bodies is best able to enforce a resolution – otherwise the dispute resolution body would ineffective.

The discussion paper (under section 3.4.1 – Enforcement difficulties) notes:

"As exempt bodies are not licensed, neither EWOV nor any other body has the powers to enforce conciliated resolutions or binding decisions on exempt bodies other than by revocation of their exemption, which may not be practical or effective, especially where the exempt body operates under a class or deemed exemption."

JEN believes this difficulty in enforcing resolutions or case handling policies against exempt bodies make it less beneficial for customers to take their complaint to EWOV over VCAT. At VCAT, when an order is made and the exempt body has not complied with the order, the exempt customer (or the party assisting the exempt customer) can enforce the order of the Tribunal through the Magistrates' Court.

We believe exempt customers in retirement villages, apartment buildings and shopping centres should be encouraged to have their disputes heard by VCAT. In comparison to EWOV, the VCAT dispute resolution process may be lengthy and there is a small application fee for civil disputes to be heard, but there is a path to ensuring the resolutions are enforced. Moreover, it should be noted that these customers may stand to benefit from cost savings gained through the bulk purchase of energy. These customers have the choice of paying a slightly higher tariff to a licensed retailer and enjoying the benefits of the EWOV scheme, assuming they do not face a barrier to exercising their choice of a retailer.

JEN would only support exempt customers having access to the EWOV resolution mechanism if the cost of taking on these disputes is not spread across the other fee paying scheme participants.

However, should EWOV's jurisdiction be extended to include certain classes of exempt customers, JEN believes it should be restricted to customers in caravan parks and rooming houses. EWOV powers may be extended to step in to resolve the complaint in the first place. If that fails, they should refer the complaint to Victorian Legal Aid, or an appropriate customer advocate, so that they can pursue the complaint on behalf of the exempt customer at VCAT. JEN understands that exempt customers in this classification are most likely to be vulnerable customers and a VCAT process may be too arduous for them to directly manage and cost recovery would be problematic. JEN considers the Victorian Government should pay the incremental cost of extending the scheme.

JEN's responses to specific questions are set out below.

What is the most appropriate forum to assist in the resolution of energy complaints between exempt bodies and their customers?

In order to be an effective dispute resolution body, JEN considers the most appropriate body to assist in the resolution of energy complaints from customers are those bodies that are empowered to enforce (or have enforced by another body) its conciliated resolutions and binding decisions.

JEN believes the Civil and Administration Tribunal (VCAT) has the power to make orders, and if the person does not comply with the order, then the order of the Tribunal through the Magistrates' Court.

Alternatively, EWOV can be empowered to step in to resolve the complaint in the first place. If that fails, they should refer the complaint to Victorian Legal Aid or an appropriate customer advocate so that they can pursue the complaint on behalf of the exempt customer at VCAT.

Are there advantages for customers and exempt bodies in having complaints heard by EWOV rather than VCAT?

Based on the DPI's analysis of VCAT versus EWOV, it appears EWOV would provide easier access and conciliation, but EWOV is not able to make binding decisions, whereas VCAT can. This means EWOV would have to direct the customer to VCAT or refer the complaint to another body for it to be heard at VCAT, which begs the question – would not the customers be better off having the complaints heard by VCAT in the first place?

If EWOV's jurisdiction was extended, should exempt bodies be obligated by to become members of EWOV?

If EWOV's jurisdiction was extended, exempt bodies should be obligated to become members of EWOV, but it is not clear how membership will be enforced. There is no point in creating an obligation if it cannot be practically implemented and enforced.

What is the most appropriate model for funding the costs of resolving disputes raised by customers of exempt bodies (e.g. fee-for-service)?

JEN believes enforcing exempt bodies to become member of the EWOV scheme will be difficult, let alone payment of fees. Not all exempt bodies are registered and it would be very difficult to identify all of them. Without having enforcement powers, it is not clear how a fee-for-service model will work.  JEN believes EWOV should not take on disputes of exempt bodies if the costs cannot be covered by the exempt bodies. Because of the difficultly in recovering the dispute resolution costs from exempt bodies, JEN considers the Victorian Government should pay the incremental cost of extending the scheme.

What is the most appropriate forum to assist in the resolution of energy complaints between exempt bodies and their customers?

In order to be an effective dispute resolution body, JEN considers the most appropriate body to assist in the resolution of energy complaints from customers are those bodies that are empowered to enforce (or have enforced by another body) its conciliated resolutions and binding decisions.

JEN believes the Civil and Administration Tribunal (VCAT) has the power to make orders, and if the person does not comply with the order, then the order of the Tribunal through the Magistrates' Court.

Alternatively, EWOV can be empowered to step in to resolve the complaint in the first place. If that fails, they should refer the complaint to Victorian Legal Aid or an appropriate customer advocate so that they can pursue the complaint on behalf of the exempt customer at VCAT.

Are there advantages for customers and exempt bodies in having complaints heard by EWOV rather than VCAT?

Based on the DPI's analysis of VCAT versus EWOV, it appears EWOV would provide easier access and conciliation, but EWOV is not able to make binding decisions, whereas VCAT can. This means EWOV would have to direct the customer to VCAT or refer the complaint to another body for it to be heard at VCAT, which begs the question – would not the customers be better off having the complaints heard by VCAT in the first place?

If EWOV's jurisdiction was extended, should exempt bodies be obligated by to become members of EWOV?

If EWOV's jurisdiction was extended, exempt bodies should be obligated to become members of EWOV, but it is not clear how membership will be enforced. There is no point in creating an obligation if it cannot be practically implemented and enforced.

What is the most appropriate model for funding the costs of resolving disputes raised by customers of exempt bodies (e.g. fee-for-service)?

JEN believes enforcing exempt bodies to become member of the EWOV scheme will be difficult, let alone payment of fees. Not all exempt bodies are registered and it would be very difficult to identify all of them. Without having enforcement powers, it is not clear how a fee-for-service model will work.  JEN believes EWOV should not take on disputes of exempt bodies if the costs cannot be covered by the exempt bodies. Because of the difficultly in recovering the dispute resolution costs from exempt bodies, JEN considers the Victorian Government should pay the incremental cost of extending the scheme.

Should only certain classifications of exempt customers have access to EWOV? If yes, what classifications of exempt customers should have access to EWOV?

JEN does not support exempt customers having access to the EWOV resolution mechanism per se. However, should the DPI decide to extend the jurisdiction of EWOV to exempt customers, JEN strong believes it should be restricted to caravan parks and rooming houses. Customers in this classification are likely to be vulnerable customers and a VCAT process may be too arduous for them to directly engage with.