RDT MRF (Hume) Pty Ltd (ABN 29 610 379 078) v Origin Energy Limited (ABN 30 000 051 696)
[2017] ACAT 34
•3 May 2017
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
RDT MRF (HUME) PTY LTD (ABN 29 610 379 078) v ORIGIN ENERGY LIMITED (ABN 30 000 051 696) (Energy and Water) [2017] ACAT 34
EW 294/2016
Catchwords:ENERGY AND WATER – large consumers of electricity – ‘move-in’ consumers – distinction between retailer and distributor - jurisdiction of the ACAT under the National Energy Retail Law –operation of section 64 of the National Retail Energy Law – potential transfer of matters between divisions of the ACAT
Legislation cited: National Energy Laws Act (South Australia) 2011
National Energy Retail Law (ACT) 2012
National Energy Retail Law 2, 5, 6, 54, 55, 64Utilities Act 2000 ss 75D, 86A, 94A, 172, part 12
Subordinate
Legislation cited: National Energy Laws Rules rr 7, 9
National Energy Retail Regulations r 7
Cases cited: Zeus and Ra Pty Ltd v Nicolaou [2003] VSCA 11
Tribunal: Senior Member A Anforth
Date of Orders: 3 May 2017
Date of Reasons for Decision: 3 May 2017
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) EW 294/2016
BETWEEN:
RDT MRF (HUME) PTY LTD (ABN 29 610 379 078)
Applicant
AND:
ORIGIN ENERGY LIMITED (ABN 30 000 051 696)
Respondent
TRIBUNAL: Senior Member A Anforth
DATE:3 May 2017
ORDER
The Tribunal orders that:
The applicant has liberty to file and serve by 24 May 2017 an application for a civil claim under the Australian Consumer Law or the National Energy Retail Law.
The current application is dismissed for want of jurisdiction.
Order 2 takes effect on 24 May 2017 or on the date on which the applicant files and serves an application in accordance with Order 1, whichever is the earliest date.
………………………………..
President G Neate AM
Delivered for and on behalf of the Tribunal
REASONS FOR DECISION
Overview
This matter concerns a dispute between RDT MRF (Hume) Pty Ltd (the applicant) as a consumer of electricity at a waste recycling site in the ACT (the site) and Origin Energy Limited (Origin) as a retailer of electricity. The applicant took over the site at short notice on 1 February 2016 from an existing operator, Remondis Australia P/L (Remondis).
Remondis had a 12 month contract with Origin for the supply of electricity on what is called the ‘non-contract rate’. The non-contract rate is a per kilowatt hour (KWh) rate of charging for the supply to large consumers of electricity that is about half of the rate of charge for residential and small consumers. There was no novation of the Remondis contract to the applicant for the ‘non-contract’ rate at the takeover or thereafter, and no new contract between the applicant and Origin.
In late January 2016 the applicant made some efforts to identify the relevant electricity supplier to the site as part of arranging the takeover. The applicant approached Origin by phone but was told by an Origin staff person that Origin was not the supplier for the site. The applicant arranged to contract with ActewAGL Retail from 1 March 2016 as the new retailer. The precise timing of the approach to ActewAGL Retail is unclear, as is the causal relationship between the approach to ActewAGL Retail and the wrong advice from Origin.
Throughout February 2016 the applicant continued to consume electricity supplied by Origin. In mid-February 2016 Origin notified the applicant of its actual involvement and invited the applicant to apply for the ‘non-contract’ rate. The applicant told Origin it had already committed to ActewAGL Retail. Origin responded that the non-contract rate was not offered to a consumer for short periods (i.e. just for February 2016) or backdated in such cases so that the applicant would be charge the standard contract rate for its consumption during February 2016.
The applicant’s case is that it was misled by the Origin staff member who initially told them that Origin was not the retailer to the site and that, but for that misleading advice, the applicant may have signed up with Origin on the reduced non-contract rate, although there was no corroborative evidence of this assertion and the assertion was only faintly put.
The retail of electricity in the ACT is governed by the Utilities Act 2000 as amended by the National Energy Retail Law (ACT) 2012 which makes applicable to the ACT the National Energy Laws (South Australia) Act 2011, the National Energy Retails Regulations 2012 (SA) and the National Energy Retail Rules. The Schedule to the National Energy Laws (South Australia) Act 2011 contains the National Energy Retail Law (NERL).
The NERL differentiates between ‘large consumers’ and ‘small consumers’ based on whether they are likely to consume 100 MWh per annum (a MegaWatt hour is 1000 KWh). The applicant exceeded this limit in one month and so was easily a ‘large consumer’.
There is no consumer protection in the NERL for large consumers. Section 172 of the Utilities Act 2000 preserves some measure of consumer protection for large consumers who have existing contracts with retailers. The applicant does not fall within this category and hence does not fall with the terms of section 172. Accordingly the Tribunal does not have jurisdiction to hear the applicant’s complaint under section 172 of the Utilities Act 2000 or the NERL.
It may be that the Tribunal has jurisdiction to hear the applicant’s complaint under the Tribunal’s civil dispute jurisdiction as either a debt matter or a claim under the Australian Consumer Law (ACL). But either of these courses of action raise other issues not pleaded and argued to date. The Tribunal could not proceed on either or both of these alternative bases on the evidence as it stands and in the absence of affording procedural fairness to the parties.
The matter was dismissed for want of jurisdiction but the dismissal was suspended to 24 May 2017 to permit the applicant to consider whether it wishes to appeal or lodge a civil claim.
History of the matter
On 10 June 2016 the applicant lodged a complaint with the Tribunal concerning the electricity account from Origin for the month of January 2016 in the sum of $40,926.31 for 119.7 MWh. Origin were notified of the complaint and invited to file a response.
On 29 June 2016 Origin filed its response, the essence of which is set out below in the context of the hearing. A copy of Origin’s standard ‘Sale of Electricity – (Deemed) Agreement Terms’ was annexed. The relevance of the term ‘Deemed’ is addressed below.
On 14 July 2016 the applicant filed a response to Origin, the essence of which is set out below in the context of the hearing.
On 18 October 2016 the parties attended conciliation at the Tribunal. On 13 December 2016 Origin advised that no settlement had resulted from the conciliation and a hearing was required.
On 15 December 2016 the Tribunal made orders for the filing of witness statements and other documents relied upon.
On 20 January 2017 the applicant filed a statement by Ms Suzy Waslin, office manager for the applicant concerning her telephone contact with Origin in late January 2016. Ms Waslin said that the person she spoke to at Origin was unable to identify a contract for Origin to supply to the site. She did not indicate what the applicant’s intention was had Origin identified itself as the retailer.
On 31 January 2017 the matter was heard by the Tribunal. Mr Garbutt (employee/engineer) appeared in person for the applicant, and Ms Edney appeared by telephone for Origin.
Mr Garbutt explained that the applicant had been awarded the tender at the site at short notice on 1 February 2016 on a “walk out-walk in” basis. This included taking over the existing electricity supply from the previous contractor, Remondis.
Remondis had entered a contract with Origin as its preferred supplier on 1 January 2016. When the applicant took over on 1 February 2016 Remondis did not execute any novation to the applicant of the electricity contract with Origin.
Ms Edney explained that novation of contracts is not automatic and requires the consent of the consumers and Origin, which had not occurred in this case. She said that Origin had to buy electricity from market to on-sell to the applicant, and the cost of the electricity to Origin depended on the term of the contract between Origin and the electricity producer. Origin offered preferential (non-contract) rates for long term electricity supply but not for short terms (less than 12 months). In the absence of any long term contract between Origin and the applicant the standard contract rate applied.
At the hearing Ms Edney produced and relied upon a series of emails and sms communications with Remondis. On 15 February 2017 Remondis advised Origin that its contract at the site finished on 1 February 2016 after which the applicant was the incumbent contractor.
Ms Edney said that the first contact with the applicant that Origin was aware of occurred on 16 February 2016, at which time the applicant confirmed that it had taken over the site from 1 February 2016.
On 19 February 2016 an email exchange occurred between an employee of the applicant and Origin in which the applicant advised its intention to move suppliers to a different retailer. The applicant was advised that it needed to set up a ‘non-contract’ account for the continuing supply by Origin in default of which the supply would be terminated. This advice to the applicant was repeated in a SMS message on 25 February 2016. There is no evidence that the applicant responded to this invitation or how Origin would have dealt with any application had the applicant promptly responded, save for the evidence that Origin would not offer non-contract rates for periods of less than 12 months.
Ms Edney said that the applicant rang Origin on 25 February 2016 and advised that they were moving to a new retailer on 1 March 2016. The officer in Origin advised that there would be no ‘non contract’ rate for such a short period (being the balance of February) and no back dating of a ‘non contract’ rate to 1 February 2016.
The applicant moved to ActewAGL Retail on 1 March 2016.
On 21 March 2016 the applicant belatedly completed the forms required by Origin for the supply from 1 February 2016 to 1 March 2016, and Origin dispatched an invoice in the sum of $40,926.31 prepared at the contract rate. The applicant refused to pay the account but has paid $21,187.26, being the amount that would have been payable by Remondis for February under its contract at the ‘non-contract’ rate.
The Tribunal adjourned the matter part heard. Orders were made for the parties to file and serve submissions after which the Tribunal would, with the consent of the parties, proceed to a decision without further hearing.
On 8 February 2017 the applicant informed the Registrar that it did not intend to make any further submissions.
On 9 February 2017 Origin made application to the Tribunal to summarily dismiss the applicant’s application on the basis that there was no evidence of wrong doing by Origin.
On 15 February 2017 the applicant filed a one page email submission. In the submission the applicant repeated that it had contacted Origin in the last week of January 2016 to ascertain whether Origin was the supplier on site. The applicant was informed that Origin was not the supplier and this was misleading advice by Origin. The applicant acknowledged Origin’s argument that the applicant rang the wrong team in Origin and that, had the applicant contacted the commercial and industrial team of Origin, the advice would have been different. The applicant contended that it was for Origin to provide the correct advice and to direct the applicant to the relevant team within Origin. The Tribunal accepts this latter submission.
On 16 February 2017 Origin objected to the further submissions from the applicant.
On 17 February 2017 the Tribunal extended the time for the parties to file and serve further submissions. The belated submissions from the applicant did not entail anything that the applicant had not put previously to the Tribunal, but for abundance of caution the Tribunal permitted both parties to file final submissions.
The parties were invited to indicate whether any further oral hearing was required in default of which the matter would be determined on the existing evidence and submissions.
On 2 March 2017 Origin advised the Registrar that it had no further submissions to make.
Legislation
The rights and responsibilities of electricity retailers and consumers in the ACT is regulated by the Utilities Act 2000 as amended by the National Energy Retail Law (ACT) 2012 which applies to the ACT the National Energy Laws (South Australia) Act 2011, the National Energy Retails Regulations 2012 (SA) and the National Energy Retail Rules. The Schedule to the National Energy Laws (South Australia) Act 2011 contains the NERL.
Following the insertion of sections 86A and 94A into the Utilities Act 2000 on 1 July 2012 the regulation of the ‘standard customer contracts’ and ‘negotiated customer contracts’ of the Utilities Act 2000 is now regulated by the NERL, and the NERL prevails over the Utilities Act 2000 to the extent of any inconsistency (section 75D of the Utilities Act 2000).
The complaints process contained in Part 12 of the Utilities Act 2000 continues to apply as modified by the National Energy Retail Law (ACT) 2012, although for reasons given below it does not apply to the present matter.
The NERL draws a distinction between:
(a)retailers and distributors of electricity;
(b)business and residential customers; and
(c)large and small customers.
‘Distributors’ and ‘retailers’ are defined in section 2 of the NERL. In short, the distributor is the entity that owns the electricity distribution system i.e. the poles and lines. In the ACT this is ActewAGL Distribution. The retailer is a body holding an authorisation under Part 5 of the NERL to buy electricity from electricity producers and sell to consumers via the distribution network. In the present case Origin is the retailer.
Section 5 of the NERL defines ‘small customer’ and ‘large customer’ by reference to their annual consumption of electricity. By operation of section 6 of the NERL, the consumption thresholds for business customers are contained in regulations. A business that consumes electricity above 100 MWh per annum is defined to be a large customer (reg 7(2) National Energy Retails Regulations 2012 (SA)). The applicant in the present case consumed 119 MWh in one month and so is easily a large consumer.
Regulation 7(2) refers to the consumption threshold for electricity as 100 MWh “per annum.” Section 5(3) describes a large business customer as one who “consumes energy ... at or above the upper consumption threshold.” In essence, those provisions refer to annual consumption as opposed to the estimated annual consumption or the annual consumption assessed by reference to the actual rate of consumption for periods less than a year. There is a difference between the rate at which electricity is consumed and the total consumption in a year. As in the present case, the consumer may consume at a high rate but for less than a full year. Given that supply contracts have to be entered before commencement of supply, it would not be possible to know in advance in any given case what the final annual consumption will be. Even if the total consumption for a prior year was known, it would not follow that the same consumption would occur in the next year.
If section 5 and regulation 7(2) were given a literal construction then electricity bills to large consumers could only be raised at the end of each year of consumption. The Tribunal is of the view that this was not the legislative intent, and it is not a sensible commercial construction of these provisions. There is no jurisprudence on the issue and the Explanatory Memorandum and Second Reading Speeches in the South Australian Parliament throw no light on the issue.
For the above reasons the Tribunal takes the view that the relevant consumption for the purposes of distinguishing small from large consumers is intended to be assessed by reference to the expected or prior known rate of consumption which is then projected over the ensuing year to arrive at the expected total consumption for that year.
This construction of the section 5 and regulation 7(2) is in part consistent with rules 7 and 9 of the NER Rules Version 4 which provide:
7Retailer initial classification of customers
(1) A customer making a request to a retailer for the sale of energy to premises of the customer under a customer retail contract must, on request by the retailer, provide sufficient information to the retailer for the retailer to classify, on the basis of that information, the customer as a residential customer or a business customer in relation to the premises.
(2) On receiving the information, the retailer must classify the customer accordingly.
(3) The retailer must, as soon as practicable, notify the distributor of the classification of the customer under this rule.
(4) The distributor must keep a record of the classification of the customer.
...
9 Distributor initial classification of business customers
(1) This rule applies to a customer who is a business customer in relation to premises, where the customer is not currently classified (or reclassified) by the distributor in relation to the premises.(2) On being notified by a retailer that the customer is a business customer, the distributor for the premises must classify the customer in relation to those premises:
(a) as a large customer or as a small customer; and
(b) if a small customer, as or as not a small market offer customer.(3) The distributor must, as soon as practicable, notify the retailer for the premises of the classification of the customer under this rule.
(4) The distributor must keep a record of the classification of the customer.
[Emphasis added]
Rule 7 pertains only to classification of the consumer by the retailer as either a residential or business consumer. The retailer then passes the information concerning the classification to the distributor. In the present case there is no issue that the applicant was a business, although the formal classification never occurred.
Rule 9 then deals with new business customers. It is the distributor (ActewAGL Distribution) and not the retailer (Origin) who is responsible for classifying the new customer as either a large or small customer. The distributor presumably makes its decision on the basis of the information provided by the retailer. Although this process did not occur in the present matter, it is possible that ActewAGL Distribution did classify the applicant as a large consumer once the applicant applied direct to ActewAGL Retail as its preferred retailer.
Part 2 of the NERL (sections 19 to 64) deals with the relationship between retailers and small customers. Section 20 of the NERL provides that there are three kinds of customer retail contracts; standard retail contracts, market retail contracts and deemed customer retail arrangements. Part 2 Division 3 of the NERL provides that a retailer must offer their ‘standard offer prices’ to small customers under the standard retail contract. Division 4 of Part 2 allows a retailer and a small customer to negotiate a market retail contract. These provisions do not apply to the applicant in the present case because the applicant is not a “small customer.’ In any event, Origin did bill the applicant at the standard offer price which is the essence of the present dispute.
Part 2 Division 9 of the NERL deals with ‘deemed customer retail arrangements’ with small consumers. It deals with the case of a ‘move-in customer’ being one that moves into premises that are already supplied with electricity and starts to consume that supply without notice to the retailer. At this point the deemed customer retail arrangement comes into effect (section 54 of the NERL). The ‘move in’ customer is required to contact the retailer and takes steps to enter a customer retail contract as soon as possible (section 54(6) of the NERL). The deemed arrangements are those of the retailer’s standard retail contract at the standard offer prices (sections 55(1) and (2) of the NERL). These provisions do not apply to the present applicant as a large customer, but again Origin did provide supply at the standard offer price.
Section 64 of the NERL, although within Part 2, deals with large customers that consume electricity without arrangements with the retailer and does appear to be apposite in this case. It provides:
[64] If a large customer consumes energy at premises without an appropriate arrangement between the customer and a retailer for payment of charges for the energy—
(a) the financially responsible retailer is entitled to charge the customer an amount for the energy at the rate the retailer considers would have been charged had such an appropriate arrangement been in place; and
(b) that amount, to the extent it is not paid to the retailer, is a debt owing by the customer to the retailer and may be recovered in a court of competent jurisdiction.
It is relevant to note that section 64(a) fixes the rate of charging as being the rate at which the retailer considers would have been charged had appropriate arrangements been made. This provision implicitly invokes the retailer’s policy on supply as opposed to any other objective criteria. It also leaves undefined what are ‘appropriate arrangements’.
Where is the Tribunal’s jurisdiction to be found?
Part 4 of the NERL contains a complaint process for small customers that involve the role of the ACT Civil and Administrative Tribunal (ACAT/Tribunal) as the local Energy Ombudsman. Part 4 of the NERL does not apply to large customers.
Part 12 of the Utilities Act 2000 (sections 169 to 184) provides a scheme for complaints to ACAT. Section 172 of the Utilities Act 2000 provides for a consumer to apply to the Tribunal for “contravention of customer contract, or customer retailer contract….made under the National Energy Retail Law (ACT), by a utility.” This power is not conditional on the customer being either a small or large consumer.
In order for section 172 to apply there must be a customer contract, or customer retailer contract, which is alleged to have been contravened. In the present case there was no customer contract, or customer retailer contract, between the applicant and Origin. The applicant was in the ‘move-in’ category.
In the case of large ‘move in’ customers there is no ‘deemed standard contract’ under the NERL such as would be case for small customers. If there is no actual customer contract, or customer retailer contract, and no deemed customer contract, then it is hard to see how a non-existent contract can be breached and hence how section 172 provides any basis for the present application to the Tribunal.
The NERL does not leave the case of large customers in a hiatus. Section 64 of the NERL applies and provides that Origin may charge the applicant “an amount for the energy at the rate the retailer considers would have been charged had such an appropriate arrangement been in place.” Presumably the applicant argues that, had they not been misled by the Origin officer in late January 2016, they would have sought novation of the Remondis contract or sought to enter their own non-contract rate agreement with Origin as a large customer. Any novation of the Remondis contract necessarily entailed the applicant remaining with Origin for the rest of Remondis’ 12 months contract. The problem with the above argument imputed to the applicant is that it is not at all clear when the applicant decided to go with ACTEW AGL as the preferred retailer and to what extent this decision was caused by the wrong advice from Origin. There was no evidence on this point or on how Origin would have responded to such an application if it had been made in later January 2016.
Even if there is prima facie merit on the applicant’s part concerning the above issue, it does not mean that the Tribunal has jurisdiction to hear the complaint. The Tribunal is a statutory body and has only such jurisdiction as the Legislature has conferred on it. There does not appear to be any jurisdiction in the Tribunal to hear complaints from large ‘move in’ consumers under either the Utilities Act 2000 or the NERL. There is no power of review in the Tribunal in relation to a grievance arising under section 64 of the NERL.
Section 64 converts the dispute into one about a debt. The Tribunal does have jurisdiction to hear claims in debt under its general civil jurisdiction but the amount of the present dispute of $40,000 exceeds the jurisdiction limit of $25,000 for a civil claim in the Tribunal. Alternatively the Tribunal has jurisdiction to hear matters arising under the Australian Consumer Law, which include claims for misleading or deceptive conduct. But again the monetary jurisdiction is capped at $25,000. The applicant could commence proceedings in the Magistrates Court for a declaration on a debt of $40,000.
Even if the parties were to take the view that the amount in question is now only approximately $19,000 following the part payment of approximately $21,000 by the applicant, and thus within the jurisdictional cap of the Tribunal, the case has not been argued on the footing of a section 64 debt or the ACL. Additional evidence would be required on these issues. It would raise issues of procedural fairness for the Tribunal to now proceed to deal with the matter as a civil claim.
On the other hand, the applicant has lodged its claim in the Tribunal. Although it nominated the Utilities Act 2000 as the source of its remedy and the matter was dealt with in the Energy and Water division of the Tribunal rather than in its Civil division, the Tribunal is one entity. There is no rule of law that prevents a matter being transferred from one Division of the Tribunal to another, subject to procedural fairness (Zeus and Ra Pty Ltd v Nicolaou [2003] VSCA 11)
The issue is now whether the applicant wants to amend its application and transfer it to the Civil division of the Tribunal to be re-argued on basis of section 64 of the NERL and/or the ACL. Whether or not an application is made, the current application must be dismissed for want of jurisdiction.
The Tribunal considers that it is appropriate to defer until 24 May 2017 the operation of an order that the application be dismissed so that the applicant has an opportunity to file and serve an amended application under the NERL or the ACL.
………………………………..
President G Neate AM
Delivered for and on behalf of the Tribunal
HEARING DETAILS
FILE NUMBER: | EW 294/2016 |
PARTIES, APPLICANT: | RDT MRF (Hume) Pty Ltd |
PARTIES, RESPONDENT: | Origin Energy Limited |
COUNSEL APPEARING, APPLICANT | N/A |
COUNSEL APPEARING, RESPONDENT | N/A |
SOLICITORS FOR APPLICANT | N/A |
SOLICITORS FOR RESPONDENT | N/A |
TRIBUNAL MEMBERS: | Senior Member A Anforth |
DATES OF HEARING: | 31 January 2017 |
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