Apartments subject to higher utility bills after developers work with retailers

It is rare for a homeowners association to vote against the power supply contract at their first annual general meeting.

Liberal MP Ray Williams chaired a committee of the NSW Legislative Assembly on embedded energy grids and said nothing had changed since the committee’s report was published last November.

“When buyers sign a lease, they essentially commit to paying for that service for life. You will receive an almost unlimited contract. It’s an absolute mistake that’s being exploited,” he said.

A big problem, he said, was the installation of large apartment blocks with municipal hot water systems with individual meters, which generated additional fees — some residents of his Kellyville constituency charged $555 a month for hot water alone.

“These guys are extortionists, they created this fake market to charge homeowners more.”

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The sale of hot water is unregulated in NSW, while those sourcing unmetered gas on embedded networks are denied NSW rebates and concessions and have no access to external dispute resolution with limited price control.

Power grids embedded in the Strata system are also exempt from the statutory three-year limit on utility contracts.

New South Wales Energy and Water Ombudsman Janine Young said her hands were tied due to limited regulation.

“EWON has recognized this growing problem through our casework, but we are unable to address the regulatory imbalances without the support of government and policymakers,” she said.

“Current regulations have not kept pace with new energy technologies and business models.”

Al Graham was paying an average of $50 a month for hot water last quarter, and last year his monthly utility bills for his one-bedroom apartment in Hornsby soared to over $200.

Graham lives in a special shelter for the disabled and has a steady income from a disability pension and struggles to pay the bills.

Al could save 25 percent with another provider, according to the government’s energy comparison site.

But his mother, Penny, said it was logistically next to impossible to switch providers: “You have to convince another provider to come and put the smart meter in, and there are ongoing charges for using the infrastructure.”

A spokesman for Origin Energy said utility charges vary by customer type, while regulations require buildings to provide easy access to gas meters, resulting in a master meter and unmetered gas bills.

Hot water costs were based on usage and the charges to be covered. Origin’s other costs include the cost of providing, maintaining, and reading hot water meters.

The spokesman said it is their intention that embedded network customers pay less than standard market offerings on energy bills, including usage and utility fees.

The previous government promised to introduce regulations including capping water prices, reviewing electricity prices and setting run-time limits at three years, and considering whether new embedded hot and cold water networks should be banned.

New South Wales Energy Minister Penny Sharpe referred questions to the Department for Planning and the Environment.

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A spokesman said the NSW Independent Pricing and Regulatory Tribunal is expected to start considering appropriate price protection measures for electricity, gas and hot or chilled water on embedded networks in NSW “soon”.

“The New South Wales Government also notes the recommendations of the final report of the New South Wales Legislative Assembly Inquiry into Embedded Networks, many of the recommendations reflecting the existing and future work programs of the New South Wales Government and national bodies on embedded networks ‘ said the spokesman.

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