Systemic Overcharging Uncovered in WA Energy Market
A major investigation into a $40 million billing error at state-owned energy provider Synergy has uncovered a shocking reality: every single energy retailer in Western Australia has been overcharging customers. The revelation has prompted Premier Roger Cook to declare the situation "a great shame" and express his extreme anger at the widespread failure.
The Scale of the Overcharging
The Economic Regulation Authority (ERA) issued a second compliance enforcement notice against Synergy after discovering the utility had wrongly charged 174,522 former customers a combined total exceeding $40.4 million despite these customers having closed their accounts. While Synergy's overpayments were by far the largest, the ERA confirmed on Tuesday that all six electricity and gas suppliers operating in WA have overcharged thousands of customers during the past two years.
Horizon Power recorded the second-highest overpayments at $213,353, while Kleenheat overcharged approximately 1,500 customers to the tune of $175,000. Synergy received the only enforcement notice because it was the only retailer that lacked adequate processes to quickly notify affected customers and process refunds.
Government and Corporate Response
Premier Cook did not mince words when addressing the scandal. "It's very serious and we are extremely angry that this has occurred," he stated. "It's a great shame that it's occurred since 2008, on and off over that period of time. This is an oversight, a neglect by Synergy, and we're very angry about it."
The Premier emphasized that his priority was ensuring customers receive their refunds, with Synergy facing a maximum fine of $100,000 if affected customers are not reimbursed by April next year. When questioned about whether tougher penalties were necessary, Mr Cook responded, "That's to be debated... My priority is to get that money back into the pockets of the customers."
Synergy Chief Executive Kurt Baker issued a public apology in October after an independent review's interim report revealed the full extent of the billing disaster. "This isn't good enough, it's not acceptable, and we've let our customers down," Mr Baker said. "On behalf of Synergy I'd like to say I'm sincerely sorry for the impact that we've had on our customers."
The company had initially notified Energy Minister Amber-Jade Sanderson in March that over-payments had been detected, but at that time believed only 2,845 Centrepay customers were affected. Mr Baker warned that the refund process would take several months, advising impacted customers that "there is nothing for you to do at this point in time, we will contact you directly."
The WA government has committed to holding all energy retailers accountable, with Premier Cook vowing, "You can have confidence that we'll continue to hold these companies to account. You can have confidence that we will make sure that when mistakes are identified, that we will rectify the situation and insist on it."
