Unclear billing

Dispute

A business customer logged a complaint with the CRU around new charges which were applied (without agreement) to their electricity bill. The supplier had listed the charges as ‘additional market charges’ (AMCs) on their bill.

The customer requested their supplier to remove the AMCs, refund the sum charged, honour the original contract (where AMCs had not been referenced) and charge the rates detailed within the contracted price plan.

The customer felt that the supplier took a risk in not forwarding purchasing electricity and did not secure the prices as contractually agreed, and that they should not be penalised for their supplier’s failure to hedge.

As part of the investigation, the CRU requested clarifications from the supplier in terms of how the ‘AMC’ was applied and calculated, how it related to a regulated pass-through charge (as indicated by the supplier), and how the application of this new charge was communicated to customers. The supplier advised that the application of the AMC was unavoidable and a temporary measure due to the unprecedented increases in global wholesale energy costs and advised that it had no option but to pass these charges on to its customers.

The supplier maintained that they were entitled to apply the additional charge as per their terms and conditions of supply (T&Cs); the supplier’s T&Cs noted that they had the right to vary its charges to reflect any variation in any element of the costs to the supplier in providing the supply of energy to its customer.

Outcome

The CRU upheld the customer’s complaint due to several factors:

• By attributing an unregulated price increase to the Single Electricity Market (SEM), the CRU considered the supplier had breached a requirement of the Electricity and Natural Gas Supplier Handbook.
• The CRU concluded that while the supplier’s T&Cs provided for a price change, the way the AMC was applied to the customer’s account was incorrect and misleading. Transparency of charging or billing structures is vital for all customers to ensure they can budget and have a clear understanding of what charges will be applied to their energy accounts and when.
• The CRU deemed that the AMC notifications received were misleading, as it implied that the AMC was a pass-through cost. These notification letters inferred the price would not change when there was a significant change to the overall price and the customer’s bills.
• The supplier did not provide 30 days’ notice prior to inclusion of the AMC on bills, which breached the supplier’s Code of Practice on Billing.
• The customer’s T&Cs were not amended to reflect the inclusion of an AMC. This was found to be a breach of Section 4.6.1 of the Handbook.
• The CRU was of the view that the introduction of the AMC was a significant change to the customer’s contract, and as such should have been published.

Although the charge had been described in a misleading manner, the T&Cs of the customer’s contract did give the supplier the option to increase prices during the contract period. The CRU directed the supplier to award 39 charter payments of €30 each, totalling €1,170.