Origin pays penalties for alleged unlawful customer disconnections

Origin has paid $80 000 in penalties issued by the Australian Energy Regulator (AER) after it allegedly unlawfully disconnected 54 premises between January 2018 and May 2019.

Origin has also provided the AER with a court enforceable undertaking outlining steps it will take to prevent further wrongful disconnections, including a systems and processes audit.

AER Chair Paula Conboy said the AER’s investigation found systemic issues with Origin’s management of customer disconnections. Origin did not have adequate processes in place to satisfy the disconnection obligations in the National Energy Retail Rules (Retail Rules).

The affected customers had contacted Origin to resolve their outstanding issues only to be unexpectedly disconnected.

“Disconnecting a premises is one of the most disruptive steps an energy retailer can take. The impact of an unexpected disconnection on the customer is significant and retailers must ensure supply is only interrupted when allowed under the Retail Rules.

“Energy is an essential service and it is crucial that customers can trust their energy provider to do the right thing.

“We expect energy companies to follow the energy laws, particularly in relation to consumer protection, and we will take enforcement action where we identify serious compliance issues,” Ms Conboy said.

The enforceable undertaking includes a commitment to engage an independent auditor, approved by the AER, to audit Origin’s training and processes.

Origin has acknowledged in the undertaking that it wrongfully disconnected the customers.

Ms Conboy said the AER would take a dim view of continued wrongful disconnections by Origin, and sounded a warning to other retailers to take heed.

“Customers must only be disconnected as a last resort. Our investigation found that Origin repeatedly failed to ensure a disconnection order was cancelled when it should have been.

“This is simply not good enough. If people get behind in their bills and then work with the company to address the issue, the company must hold up its end of the bargain.

“It is those in our community who are most vulnerable that suffer the greatest penalty when companies break the rules or get it wrong,” Ms Conboy said.

Background

Rule 116 of the National Energy Retail Rules sets out the circumstances where a retailer may disconnect an energy customer. In particular, rule 116 prohibits a retailer from arranging to disconnect a customer’s premises where that customer:

  • is a hardship customer or residential customer and is adhering to a payment plan
  • has an amount owing that is less than the amount approved by the AER (currently $300) and the customer has agreed with the retailer to repay the amount.

About the AER

The AER works to make all Australian energy consumers better off, now and in the future. 

We protect the interests of household and small business consumers by enforcing the Retail Law. Our retail energy market functions cover New South Wales, South Australia, Tasmania, the ACT and Queensland. We do not set the prices consumers pay.

 We enforce the laws for the National Electricity Market and spot gas markets in southern and eastern Australia. We monitor and report on the conduct of energy businesses and the effectiveness of competition.

We regulate electricity networks and covered gas pipelines, in all jurisdictions except Western Australia. We set the amount of revenue that network businesses can recover from customers for using these networks.

We drive effective competition where it is feasible and provide effective regulation where it is not. We equip consumers to participate effectively, including through our Energy Made Easy website, and protect those who are unable to safeguard their own interests. We use our expertise to inform debate about Australia’s energy future.

Sector: 
Issued date: 
16 August 2019
AER reference: 
NR 15/19
Contact: 
AER Media 0466 409 921 media@aer.gov.au