Queensland Competition Authority

Transcription

1 Queensland Competition Authority Electrical industry guaranteed service levels June 2018 Further document information Arial 14 Bold

2 Guaranteed Service Levels Master Electricians Australia (MEA) is the trade association representing electrical contractors recognised by industry, government and the community as the electrical industry s leading business partner, knowledge source and advocate. Our website is Master Electricians appreciates the opportunity to comment on the proposed guarantee. Master Electricians in reviewing the document has done so based on the experience of what an electrical contractor and or consumer may experience. Exemption for wet weather events Energy Queensland recommends that supply interruptions that result from extreme weather events ('major event days'), but that do not trigger an activation of the Natural Disaster Relief and Recovery Arrangements, be excluded from GSL liability. MEA Response In examining Energy Queensland response and the current GSL s we note that the disruption durations take into effect location of the disruption being >8hrs, >18 and >24 hours in CBD Urban and rural settings. We particularly note that Energy Queensland have not defined a major weather event and as such with no alternative definition we struggle to see how the Queensland Competition Authority QCA, could make any informed judgement or recommendation against the objectives of the GSL. MEA does suspect that Energy Queensland may provide a definition during this additional period of consultation and as such we would think it prudent for the QCA to consult further on definitions and implementation of such a change before making a final determination. MEA suggests that the initial linking of the Natural Disaster status was a clear way in which the distributors could be held accountable in terms of when and if a duration is or is not subject to the GSL s. MEA would be reticent to support any form of watering down of the definition as we perceive doing so would mean outages could be prolonged based on a cost saving basis. Energy Queensland also gives no undertaking and no guarantee that it would continue to move staff around or supply emergency crews to maintain the current service and speed in which repairs are made now. Energy Queensland highlights that over a 5 year period from 2013 to 2018 Energex incurred $1.7 million in MED events. However, MEA would state the average cost of approximately $340,000 per year, serves as an incentive to perform, and achieves the aims of the GSL by ensuring as far as practicable distribution is repaired as soon as possible taking into account natural disasters. Adding Ergons average of $600,000 per year Energy Qld profit of $881 million after income tax equivalent in the financial year is equivalent to % of profit, after tax. 'Time to respond' and 'telephone answering' GSLs Master Electricians Australia Document title Page 2

3 Master Electricians Australia and the Queensland Farmers' Federation recommend the addition of two new GSLs 'time to respond to notification of a problem' and 'telephone answering'. To support its recommendation, the federation cited a recent example of the Queensland Dairy farmers' Organisation being unable to obtain timely and reliable information from Ergon Energy regarding supply outages following storms. The federation does not suggest GSL payment levels or time thresholds for these new GSLs. MEA believes that regardless of the AEM participant status being a retailer, DNSP or generator all companies should be transparent in their performance across a number of factors. A company s role in the AEM will then determine which indicators are important in evaluating the overall performance of the organisation in question against the objective of the AEM. In Queensland, Energy Queensland is both a DNSP and a retailer and as such it should be required to report as do other retailers. To not require this GSL puts other parts of the market at an unfair comparison and some may say be held less accountable. The AER report already is recording figures for Ergon Energy Queensland and as such we believe that their opposition to this requires is in part due to the poor performance and what we would see as low priority of this indicator. Table 1 from the AER GSL report shows Ergon Energy Queensland with the worst record in answering calls, with the second worse average wait time and the 6th worse drop out rate out of 29 major retailers. MEA would also demonstrate that the AER final decision on STPIS for the to reporting period set Ergons 5 year averaged reporting level. The AER approved that Ergon would set a goal of 77.3%# of calls answered within 30 seconds. It is obvious there has been a significant decrease in customer service based on these figures over the last 3 years, taking into account it is our understanding that this level was set based on a 5 year rolling average that Ergon demonstrated. %20Attachment%2011%20-%20STPIS%20-%20October% pdf Table 11-2 # MEA would also point to the Energy Queensland annual report which on page 22 has published similar internal GSL s demonstrating the performance achieved. As such there should be no additional cost or burden for the organisation to continue and improve reporting in this area. Master Electricians Australia Document title Page 3

4 Retailer Calls taken in 30 secs (%) Average wait time (secs) Calls abandoned before being answered (%) 1st Energy 72% 24% % 4% ActewAGL 53% 16% % 4% AGL 85% 0% % 0% Alinta Energy 73% 5% % 1% Aurora Energy 73% 0% % 0% BlueNRG 66% 8% 7 2% 5% Click Energy 70% 0% % 2% CovaU 96% 8% % 4% Diamond Energy 100% 0% 0 0 0% 0% Energy Locals 79% 8 1% EnergyAustralia 93% 16% % 0% Enova Energy 70% 16% % 8% Ergon Energy Queensland 43% 8% % 1% ERM Power 91% 6% % 0% Lumo Energy 90% 6% % 0% M2 Energy 89% 1% 2% 2% Metered Energy Holdings 100% 0% 8 8 0% 0% Mojo Power 47% 34% % 15% Momentum Energy 73% 10% % 2% Next Business Energy 88% 4% % 0% Origin Energy 72% 19% % 10% People Energy 92% 60 2% Pooled Energy 98% 7% 9 1 4% 0% Powerdirect 77% 12% % 2% Powershop 78% 17% % 0% QEnergy 95% 1% 4 0 5% 1% Red Energy 58% 19% % 3% Sanctuary Energy 100% 10% 8 3 0% 1% Savant Energy Power Networks 92% 0% 9 7 3% 1% Table 1 Phone calls to retailers in , ANNUAL REPORT ON COMPLIANCE & PERFORMANCE OF THE RETAIL ENERGY MARKET Master Electricians Australia Document title Page 4

5 Extension of GSLs to microgrids The Clean Energy Council states that, in future, microgrids will play an increasingly important role in delivering electricity supply in Queensland, with Energex and Ergon Energy poised to operate microgrids in future. The council considers that customers should not be expected to move [from network] to microgrid supply unless supply is offered to them with protections similar to those for electricity supply via the grid. Accordingly, the council recommends changing GSL arrangements to include GSLs for microgrid operations, updating GSL threshold triggers to reflect inclusion of microgrids, and for these triggers to be at least equal to those for a long rural feeder. MEA agrees with the Clean Energy Council position. Applying GSLs to retailers (Power of Choice reforms) The Energy and Water Ombudsman Queensland (EWOQ) encourages the QCA to monitor the potential need for the interruption GSL to be extended to retailers following the Power of Choice reforms. The Queensland Council of Social Service (QCOSS), Queensland Consumers' Association and Master Electricians Australia recommend the GSL arrangements be extended to retailer initiated interruptions. Energy Queensland notes that the GSL regime is not aligned with the roles and responsibilities of distributors and retailers following the Power of Choice reforms. Energy Queensland requests that any potential changes to the GSL regime in light of the Power of Choice reforms be part of a separate consultation process. Master Electricians Australia suggests the QCA use the review to assist the Queensland Energy Minister to facilitate GSL arrangements being applied to retailers through Australian Energy Market Commission rule change(s). MEA supports that GSL be extended to Retailers. As previously stated in these submissions, some GSL are not as relevant to DNSP as Retailers, and vice versa. The AEM and the Queensland Competition Authority (QCA) role is to ensure consumers do not experience a reduction in service timeliness or professionalism or experience finger pointing and blame shifting between AEM participants. MEA believes as such GSL should apply at all levels of the market and must work in unison to ensure the best customer service. Energy Queensland(EQ) note that the GSL is not aligned with the roles and responsibilities of DNSP and retailers following Power of Choice. MEA interpretation of these comments by EQ is leading to a belief that GSL are no longer required or applicable to it as a DNSP (EQ). MEA however would counter this by highlighting that EQ s, Ergon Energy Retail is the retailing arm and has a significant investment and brand recognition with Ergon Energy Distribution which participates in the metering market. EQ is a vertically integrated organisation and all its entities must be accountable. To remove GSL across the whole business will lead to performance issues as seen in our previous submissions with less than 50% of calls being answered within 30 seconds and the second worst performance within Queensland and missed connection deadlines via Energex. Master Electricians Australia Document title Page 5

6 MEA would highlight to the QCA, that Energy Queensland, Energex, is contracted by metering providers in SE Qld to assist in completing new connections. MEA understand metering work to be contestable work. Energy Queensland, via Energex, has found a way to re-enter a market that under the AEM rules specifically excluded them from entering. Energy Queensland, through AEM ring fencing provisions were made to divest metering services to open to competition. What has ensued since POC commenced is that retailers and metering coordinators have had to engage with Energex to undertake contestable work behind the meter to try an ensure they meet their own GSL s for metering. MEA believes these arrangements are directly working against the objectives of the AEM ring fencing and adding considerable cost to consumers. Power of Choice reforms across Australia have resulted in varied responses and outcomes. The worse results have been experienced in Queensland, South Australia and Tasmania. Master Electricians is working with various state and federal bodies to improve the situation. Progress is slow. As part of our response we gathered evidence from members. MEA received data from 33 Queensland members in March The information from these members demonstrated that the implementation of Power of Choice electrical contractors have experienced significant and costly delays in over 260 projects. In these 260 projects the vast majority of those have waited for more than 3 months for a meter to be put in place. Information from Master Builder Queensland (MBAQ) and the Housing Industry Association (HIA) relayed that most were now operating with generators onsite due to the delays. The MEA survey tried to ascertain the costs involved. Contractors had difficulty in consistently quantifying the extra costs they experienced but reported direct cost of approximately $700 per installation. This $700 does not include costs for the builder or the home owner. Contractors also tried to estimate indirect costs. Contractors articulated losses with the following examples loss of contracts approx. $75,000, loss of time to business $5000 plus loss of future customer jobs $25,000 To be determined. If the Builder believes I am at fault, then I will be sacked losing $800,000 of work. NSW, Victoria and Western Australia have had limited trouble from POC for a combination of reasons. WA is not part of the AEM and not subject to the change. Victoria Government have delayed the POC till 2021 due to implementation concerns. NSW have experienced no adverse effects due to the fact the Electrical Contractors can train as Accredited Service Providers (NSW). This scheme allows any electrical contractor to be trained and granted access to live distribution network to allow residential service connection and metering supply and installation to be undertaken. WA also train electrical contractors through the Service Apparatus Connect Scheme (SACS). NSW and WA systems result in a reduction of at least 2 if not 3 Truck Visits as experienced in Qld and SA and reduces the number of organisations needed to complete the transaction by up to 2 companies. Master Electricians Australia Document title Page 6

7 This does not occur in Queensland and SA and is a major contributor to price increase and time delays to consumers due to a lack of coordination in achieving connection for the customer. The combination of an inconsistent GSL does not hold any or the collective group to account and creates multiple points of failure and blame shifting. In our view the QCA should ensure that Retailers should completely own the customer and have GSLs that relate to connection timeframes (including service alterations) DNSP needs to provide a service to the Retailer and DNSP should have GSLs to the retailers, and Electrical Contractors should be freely available to train and gain authorisation as an authorised / accredited service providers to conduct full metering installation work, and Metering providers should have GSLs however this should be the responsibility of a Retailer to set through contract negotiation and service levels, rather than enshrined in statue. GSL payment levels Energy Queensland and EWOQ propose that GSL payments and annual caps change in line with inflation. The Queensland Farmers' Federation suggests the increase of GSL payments of a minimum of CPI for the past five-year period. QCOSS considers GSL payments should be linked to increases in network charges rather than inflation. EWOQ also suggests the QCA consider increasing GSL payments to more closely reflect real increases in electricity prices since they were first determined. Master Electricians Australia argues that GSL payments should be escalated in line with the increases in penalty unit amounts in Queensland, or in accordance with electricity price rises in Queensland. The Queensland Consumers' Association considers a substantial increase in the level of GSL payments for all categories is required to increase the incentive for distributors to improve performance. MEA maintains its position that the GSL s should be increased. The starting point and methodology of increase should be clear and unambiguous. MEA believes that the rates may be set by using one of 2 methodologies. The first method being penalties altered each year based on CPI or regulatory set percentage, as suggested by MEA QCOSS and Energy Queensland. This would then increase each year during the review period. The second is to set a new penalty to cover the 5-year period. It is MEA view that should this second methodology be chosen then the amount should increase considering an additional 5 years of compounded increases. As an example, if the current $ is chosen compounding at 5% for 5 years. Master Electricians Australia Document title Page 7

8 The example would result $ ( /1) (1*5) = $ with rounding applied to the nearest 5cents would equate to $ The $ would then apply across the 5 years and requires no further review or parliamentary review during the period. Both methodologies would result in a clear understanding and calculation method. Customers' awareness of GSLs QCOSS states that there is no requirement [on the distributors] to notify a customer that they may be eligible for a GSL payment. Accordingly, QCOSS recommends that distributors be required to notify customers that a GSL trigger event has occurred and that they may be eligible for a GSL payment. EWOQ recommends the QCA develop guidelines around how distributors increase customer awareness and education around the provision of GSLs, how they are administered and what their role is in enhancing customer service and network reliability. The Queensland Farmers' Federation considers customer awareness of the GSL regime and the automatic crediting of payments to be low, and recommends that Energex and Ergon Energy utilise their media channels to increase public awareness. The Queensland Consumers' Association proposes the QCA publish consumer friendly information about the GSL scheme and payments. It also considers the distributors should increase customers' awareness of [customers'] rights, and the processes involved, to claim compensation caused by or attributable to the distributor. MEA agrees that the General Public should be better educated regarding GSL s however may suggest that an additional channel of communication may well be through the consumers own electrical contractor. MEA believes that this may well be achieved utilising education forums already in place with Electrical Contractors. Equity between GSL arrangements in the Energex and Ergon Energy distribution areas QCOSS recommends that GSL thresholds and payments be the same in the Energex and Ergon Energy distribution areas. QCOSS cites a power outage in Woorabinda which lasted 23 hours and 40 minutes, and therefore GSL payments were not triggered. QCOSS considers that this is inequitable, given the same outage duration in the Energex distribution area would trigger a GSL payment. EWOQ recommends the QCA continue to consider regional variation in reliability when determining GSL thresholds. Wrongful disconnections QCOSS notes that: retailers and distributors are required to share information on their life support registers to avoid disconnecting customers on life support equipment Master Electricians Australia Document title Page 8

9 distributors are regularly fined for breaching their obligations to users listed on the life support register, mainly for disconnecting such users without providing four business days written notice before planned maintenance. QCOSS and the Queensland Consumers' Association recommend that the wrongful disconnection GSL be extended to retailers, as is the case in Victoria. MEA agrees with QCOSS and the Queensland Consumers Association positions on this issue. Jason O Dwyer Manager Advisory Services Master Electricians Australia Document title Page 9