Earlier this year the Mineral and Energy Resources and Other Legislation Amendment Act 2020 (Qld) was passed. This Act implemented amendments to the Energy and Water Ombudsman Act 2006 (Qld) (EWO Act) to facilitate the expansion of the jurisdiction of the Energy and Water Ombudsman Queensland to certain classes of electricity on-suppliers.
What you need to know
Recent amendments to the EWO Act provide a framework to extend the jurisdiction of the Energy and Water Ombudsman Queensland to prescribed categories of on-suppliers. The categories of on-suppliers will be detailed in forthcoming regulations. We expect it will cover on-suppliers of electricity to residential customers. This is likely to include on-supply in the context of retirement villages, manufactured home estates and caravan parks. The regulations will also set out the applicable fee framework.
On-suppliers need to be aware that these changes are imminent. As the amendments are implemented by regulation, they can occur quickly and without notice. These changes have the potential to increase the regulatory and financial burden of electricity on-suppliers.
We will keep you informed of these changes as they occur.
The details
The jurisdiction of the Energy and Water Ombudsman extends to disputes between a “relevant energy customer” and an “energy entity”.
A relevant energy customer includes an exempt customer under the National Energy Retail Law (Queensland) (NERLQ) in the circumstances where a condition is imposed on the exempt seller that it complies with the EWO Act to the extent it applies to the exempt seller.
Condition 17 of the AER (Retail) Exempt Selling Guideline states that an exempt person must, if permitted by an energy ombudsman scheme:
- be a member of, or subject to, an energy ombudsman scheme for each jurisdiction where it sells energy to exempt customers; and
- comply with the requirements of that scheme.
That condition applies to the following on-supplier classes:
- D2: Persons selling metered energy to fewer than 10 residential customers within the limits of a site that they own, occupy or operate.
- D6: Persons selling unmetered electricity to residential customers.
- R2: Persons selling metered energy to 10 or more residential customers within the limits of a site that they own, occupy or operate.
- R3: Retirement villages selling metered energy to residential customers within the limits of a site that they own, occupy or operate.
- R4: Persons selling metered energy in caravan parks, residential parks and manufactured home estates to residents who principally reside there.
Despite the above provisions, section 12 of the EWO Act states that disputes between an on-supplier of electricity and its customer is excluded from the jurisdiction of the Energy and Water Ombudsman, except where the on-supplier is a “prescribed entity”. The “prescribed entity” is to be defined by regulation. The Minister for Natural Resources, Mines and Energy can prescribe new categories of ombudsman scheme participants and set the fee framework, including the ability to defer those fees where appropriate.
Although we don’t have any detail on the regulation, the Regulatory Impact Statement: Dispute resolution for residential embedded network customers, published by the Department of Natural Resources, Mines and Energy in October 2019, summarised the Department’s position as follows:
- the jurisdiction of the Energy and Water Ombudsman be extended to residential embedded network customers in Queensland;
- the Energy and Water Ombudsman establish a ‘user pays’ fee structure for exempt sellers which consists of a price per complaint based on a sliding scale that relates to the number of customers of the ‘exempt seller’;
- any fees be delayed for at least 12 months; and
- no annual membership fee for exempt sellers.
For further information and discussion, please contact our Resources and Energyor Manufactured Homesteam.