Energy hardship in land lease communities

 

The Tenants’ Union of NSW has been hearing from residents about cost-of-living pressures related to living in land lease communities. The issues include excessive site fee increases but lately advice is more often being sought around the significant jump in the cost of utilities, particularly for electricity.

For some residents in communities with embedded networks we have heard about electricity bills almost doubling. The recent amendments to the Residential Land Lease Communities Act, combined with the Independent Pricing and Regulatory Tribunal’s determination on the median retail market offer are the main contributors to the increase.

This is an odd outcome given that the previously applied cheaper ‘Reckless’ method was considered sufficient to cover the total of the operator’s bill from their retailer of choice.

The cost of electricity in general is also set to increase, with retailers citing rising costs at the grid as the reason.

For some other communities water access charges are also reported to be on the rise due to changes in how residential land lease communities are billed by their local councils.

Hearing from more residents about utilities has us concerned that some, particularly those on statutory incomes may be facing energy hardship.

In a report by Energy Consumers Australia, Senior Policy Associate Dr Caroline Valente describes energy hardship as:

• being unable to pay energy bills;
• restricting energy consumption to the detriment of health and well being or;
• having relatively low income and spending a high proportion of it on energy.

In the same report it was found that energy hardship contributed to:

• mental and physical decline,
• food insecurity,
• impacts on consumption including food, medical treatments, clothing, personal care and hobbies,
• social exclusion and
• dramatic changes in energy practices.

In retailer terms, customer hardship is generally described as a life event impacting on household income. For example:

• Someone in the family being sick or passing away
• Experiencing violence in your life
• Loss of employment or a reduction in employment hours.

While these are helpful considerations by retailers, it could discourage people from asking for help when they are simply struggling with the day-to-day cost of living.

We would encourage anyone experiencing energy hardship to contact their service provider – regardless of the reason for the hardship. Ask about their hardship policy and discuss options to manage expenses.

Having an understanding of your rights and obligations and those of the energy provider is invaluable when navigating your options.

Under the Residential Land Lease Communities Act there are requirements on the utility provider around charging and issuing utility accounts whereby a utility means: electricity, gas, sewerage, water, or another service prescribed by the Regulations. (Currently there aren’t any others prescribed.)

For home owners and tenants in land lease communities, you must pay utility charges to the operator or a third party supplier if:

it is a term of the site agreement or tenancy agreement; and

the usage is separately metered; and

the operator or third party supplier gives the home owner or tenant an itemised account in accordance with section 83 of the Act (section 83 outlines what should be included in the bill); and

the home owner or tenant must be given 21 days to pay.

When it comes to electricity or gas from an embedded network, the operator or third party supplier needs to be registered as an exempt seller and comply with the Australian Energy Regulator (AER’s) exempt seller guidelines. Under these guidelines you should be issued bills at least every 3 months.

The Residential Land Lease Communities Act standardises this billing frequency across other utilities that the operator is associated with supplying.

For retailers covered by the National Energy Retail Rules, the billing frequency must be at least every 100 days – for example if you enter into your own contract with an electricity provider in the private market.

The timeframes for billing can help with budgeting for bills by putting aside or paying some money each pay cycle toward your bills.

Many energy retailers provide a ‘bill smoothing’ payment option that calculates estimated usage to be paid by instalments in advance. You can enquire with your retailer about paying by instalments.

When there are unpaid utility charges

Just like other energy retail laws there is provision in the Residential Land Lease Communities Act for the operator or third party supplier to apply a late fee or a fee for dishonoured payments. The amount must reflect actual and reasonable costs incurred by the supplier.

Whether an energy utility is regulated under the AER’s Exempt Selling Guidelines or the National Energy Retail Rules, there are some equivalent consumer protections for customers having difficulty making payments.

Energy retailers and exempt on-sellers are required to have a hardship policy. This must be provided to customers when they express difficulty making payments, along with other information such as:

• Information directing you to energy efficiency resources, government & non government energy rebates, concessions and relief schemes.
• Information about financial counselling services

They must offer you flexible payment options and a payment plan that has specific and clear information:

• how long it is for,
• the frequency and amount,
• the number of instalments.

If you report that you are experiencing financial difficulties, exempt sellers and retailers must not charge late fees or security deposit fees to a hardship customer.

The AER’s Exempt Selling guidelines were recently reviewed and will soon include a requirement for exempt sellers to have a policy around domestic and family violence (DV). This already exists for energy retailers covered by the National Energy Retail Rules.

Requirements for the DV policy:

• Better data security of your energy related information
• Consulting with you about your preferred form of communication
• Not asking for evidence that you are affected by DV
• Allowing you to nominate a support person
• Assistance around difficulties paying
• Not disconnecting you if unpaid energy bills resulted from family violence or would impact your safety.

Dispute Resolution

Authorised energy retailers and exempt sellers alike must have their own procedures for handling complaints. These procedures must be made available to their customers. Ask for a copy before lodging a complaint or dispute about your charges or billing.

They must also be members of their state energy ombudsman scheme, which act as an external dispute resolution service. In NSW this is known as the Energy and Water Ombudsman of NSW (EWON). EWON can assist with most electricity, gas and some water customers. (See contact details below.)

If you are worried about making payments

If you think you might not be able to pay your utilities charges, we urge you to discuss a payment plan with the operator or third party supplier – as early as possible.

For help with what to agree to, there are financial counselling services across NSW that can assist or provide an appropriate referral. (See below for contact details.)

If the operator is taking you to Tribunal

If an operator lodges an application at the NSW Civil and Administrative Tribunal (NCAT) to recover utility arrears, it is a good idea to contact your local Tenants Advice and Advocacy service (contact details on the back cover). Getting advice can help to ensure your circumstances are properly considered at the hearing.

A Tribunal application about utility arrears allows the resident and operator to consent to orders being made without a hearing. You should only consent if it is in your best interests to do so. For example, if there is a mutually agreed payment plan between you and the operator or third party supplier that can be drafted into Tribunal orders.

Worried about disconnection?

There are a number of consumer protections that exempt sellers and retailers must follow before proceeding with disconnection of a customer – with a few exceptions.

Disconnection can occur if maintaining supply is unsafe, if the customer has vacated the premises, or upon the customer’s request.

The procedure leading toward disconnection involves regular contact, reminders and notifications around your options and the risk of disconnection.

You cannot be disconnected if:

• You have reached out and engaged with the hardship assistance available and are complying with a payment plan.
• A person residing at your premises requires life support equipment that needs power to operate. The premises would normally need to have been registered with the provider as requiring such equipment.
• A formal application has been made with an organisation responsible for energy charge rebates, concessions or a relief scheme and a decision hasn’t been made.
• You have made a complaint about the proposed reason for disconnection or de-energisation to the retailer or EWON and the complaint remains unresolved.

Accessing help

EAPA vouchers

Energy Account Payment Assistance (EAPA) vouchers, are available through an application process if you meet the following requirements:

• If you are experiencing a short-term financial crisis or emergency that makes it difficult to pay your energy bills. For example, unexpected medical expenses, loss of income, family illness, or other unexpected expenses.
• The energy account must be in your name
• You need to have a valid concession card such as a Pensioner Concession Card, Health Care Card, Low Income Health Care Card, or Veteran Gold Card.

You can apply through Service NSW or by contacting an approved EAPA provider, which is often a community organization. Supporting documentation is needed to assess your application.

Other supports

You can search for other cost-of-living or energy support concessions, rebates, and assistance at Service NSW: service.nsw.gov.au/services/concessions-rebates-and-assistance#energy-and-utilities

Financial counselling

National Debt Helpline: ndh.org.au or 1800 007 007 Financial Rights Legal Centre: financialrights.org.au

Aboriginal and Torres Strait Islander people may prefer to contact Mob Strong Debt Helpline on 1800 808 488.

Energy and Water Ombudsman NSW (EWON)

EWON may be able to help with complaints and dispute resolution: ewon.com.au or 1800 246 545

 

---

This article was published in Outasite magazine issue 13. Outasite is published once annually. Outasite Lite email newsletter is sent several times a year – subscribe here. All past issues are available in the archive.