NSW energy watchdog bemoans 'confusion, broken trust' as smart meter rollout sputters

An energy watchdog has sounded the alarm over the rollout of smart meters in Australia's most populous state, saying too many consumers are being hit with poor service and left worse off.

The New South Wales Energy and Water Ombudsman is the latest body to shine a light on shortcomings in the deployment of smart meters to millions of homes across the country.

In a report to be released on Monday, the NSW Ombudsman noted with some disbelief that there had been a big jump in the number of complaints it received about estimated power bills.

This was despite the fact smart meters, which had been installed on almost half of all homes in NSW, were supposed to ensure timely, accurate meter readings that could be done remotely, eliminating the need for estimated bills.

The watchdog said there had also been a major increase in the number of complaints related to sudden, unexplained changes to people's electricity tariffs.

Such changes often involved customers being switched from flat rate prices, where they paid the same rate for a unit of power no matter when they bought it, to complex and dynamic charges.

Among these were time-of-use tariffs, in which customers paid more for power at peak times, and demand charges, which involved charging someone based on their single biggest half-hour of use across an entire month.

Ombudsman Janine Young also took aim at changes to metering that were supposed to give consumers more control over their consumption while allowing them to reduce their bills.

She said the so-called Power of Choice reforms, which were implemented in 2017, had delivered some "great" benefits, especially for more engaged and educated consumers.

But in other ways, Ms Young said the changes were backfiring.

"The smart meter rollout aimed to increase flexibility and customer engagement with the energy market, by allowing customers to manage their energy usage and save money," Ms Young said.

"But we aren't seeing evidence of this in complaints that come to [the ombudsman], in fact, we are seeing the opposite.

New kit, old complaints

Energy ombudsmen are notionally independent bodies set up to resolve complaints from consumers.

They are funded by energy firms, which are required to be members and pay fees.

According to the ombudsman's office, the share of complaints it received related to estimated bills had rocketed from 5.8 per cent in 2015-16 to almost 13 per cent last financial year.

They had increased from 8.7 per cent since 2017, when the reforms came into effect.

By comparison, Ms Young noted the proportion of complaints related to estimated bills fielded by her counterpart in Victoria was hovering at between 1 and 2 per cent.

She said this was despite the fact Victoria had the highest rate of smart meter uptake in the country, with almost every home having one.

Ms Young said problems with the rollout of smart meters risked becoming more acute amid efforts to fast-track their deployment across Australia.

Under a mandate issued last year by the Australian Energy Market Commission, every household is supposed to get a smart meter by the end of the decade.

"The rollout is going to be accelerated and we need to reverse that trend now.

"Smart meters are a great tool when they're all working to the benefit of the sector and to the benefits of consumers.

"But we're getting complaints to say that's not currently the case."

'Crowded and confused'

Of particular concern to Ms Young were changes to metering that allowed unregulated private companies to provide the service.

Previously, network poles-and-wires companies such as Ausgrid and Endeavour Energy were responsible for installing and managing meters on customers' properties.

However, Ms Young noted that the Power of Choice reforms had ushered in completely different rules in which new, and largely unaccountable, players had entered the mix.

She said these providers were not only responsible for the meters themselves, but often also the data that was generated.

Yet, she said consumers invariably had no direct line to the metering companies, which were also not covered by the ombudsman's remit.

The result, she said, was a "crowded and complex" market in which complaints took longer to resolve.

"It's part of the regulatory framework now and in my experience, it's difficult to roll things back," she said.

"These are unintended consequences, dare I say it, so let's identify where the root cause of these complaints is and find out ways to fix it.

"As the energy ombudsman, what I've got to deal with are the complaints that arise from a regulatory framework and be able to work with the regulators and work with the retailers and the networks.

"And what I'd like to do is work with the meter data providers, service providers, and build a relationship between them and consumers to get things fixed.

"If, as a result of putting the spotlight on what's not working, there's a move by the sector to change the rules, then there's a process to go through.

Ms Young said consumers with any complaints or queries about smart electricity meters should contact her office on 1800 246 545.