The gym and the $100,000 power bill

A gym owner who ended up with a power bill of almost $100,000 is an example of a systemic problem in the electricity market, a complaints provider says.

Utilities Disputes, an external disputes provider for the utilities sector, has released its latest annual report, which shows it was contacted by more than 27,000 New Zealanders over the year. The number of formal complaints increased by 62 percent to 13,554.

Utilities Disputes Commissioner Neil Mallon said the increase in complaints was due to a combination of factors, including tough economic conditions, price increases and a willingness by consumers to take action when they thought they had not been treated fairly.

The most common issues raised by consumers involved complaints about customer service issues, including difficulties in getting through to the provider, as well as failures to act as agreed and poor complaint handling. Billing complaints were the second most common issue, raised in 47 percent of complaints, often relating to affordability, unclear or disputed bills.

The scheme also highlighted a number of systemic issues it had identified, which it said could highlight gaps or inefficiencies in how services were delivered to consumers.

A key problem was large catch-up bills, either through reliance on estimates for too long due to old meters, or meters not communicating correctly.

One complaint the scheme dealt with was from a gym owner who had taken over a factory. The premises' electricity meter had not been communicating with the provider and bills were being sent on the basis of estimates for a long period.

The provider was relying on information from a lockdown and when the actual usage was assessed, it sent a catch-up bill of more than $76,000 and tried to deduct that amount from the gym's bank account.

The customer disputed the usage and the amount owing increased to $93,000.

Utilities Disputes does not identify customers or the providers complained about.

The commissioner looked into it and was satisfied the bill reflected real electricity use, and that the provider had made genuine attempts to get meter readings.

But the commissioner said the provider should not have attempted to withdraw such a large amount of money from the customers' bank account without warning or communication.

"The amount was many, many times more than the customer's average bill and had the potential to cause the customer significant hardship. The provider offered to discount the customer's bill by 30 percent and offered a repayment plan so it could be paid off over time."

Other systemic issues included electricity supply being decommissioned without appropriate consent, damage to underground cables due to excavation work. uncertainty over the ownership of electricity assets, and impersonation scams.

Another related to solar power contracts and exit costs.

In one case, a customer had entered a solar and battery subscription agreement.

But after the system was installed, the customer became worried that their power bills had increased and asked for it to be removed.

The solar provider agreed but said the customer would have to pay $9000.

"Utilities Disputes reviewed the customer's electricity usage and confirmed the promised returns were being delivered by the solar system that had been installed," the scheme said in its case note.

"While it was correct the customer's electricity bills had increased that was due to higher overall usage and the customer's decision to sign up with a new electricity provider for the electricity used from the grid. This shift in electricity provider meant he was not following the savings model set out in the contract with their solar provider."

But the commissioner was worried the provider had not taken enough steps to inform the customer about the potential termination costs and the consequences of ending the agreement.

"However, he was satisfied the solar provider had met basic contractual principles when the contract was agreed and it was not reasonable for the customer to assume there would not be cost implications from changing their mind, particularly where the solar system was providing the promised benefits."

Utilities Disputes said the main reasons people complained about solar were customer service, then billing and equipment.

"Solar subscription products can produce billing outcomes that are not always easy for customers to understand. Factors such as how much energy is exported, how a battery is configured, and household usage patterns can all affect savings. Where customers believe the system is not delivering the expected benefit, termination fees and removal costs can quickly become the focus and need to be clearly and prominently explained.

"Solar subscription products require clear 'how it works' explanations to align expectations with likely billing outcomes. Providers should clearly explain export versus self-consumption, battery settings, and usage patterns during onboarding. Termination and removal costs should be disclosed in a way customers cannot miss, particularly where the amounts are significant."

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