Embedded electricity networks see apartment dwellers paying too much for power

YET another issue they don’t tell buyers about when looking at high rise/apartment living … retirement villages … and caravan parks!

GREED is good for some ….

AFTER being fleeced for so long by embedded networks it would seem that residents would be so depleted there is nothing left to invest in solar panels or electric vehicle charging stations … WT ****


Embedded electricity networks see apartment dwellers paying too much for power

7.30 By Liz Hobday

30 OCTOBER 2019

Close up of insulators on power lines outside an apartment block

PHOTO: Apartment residents are just some customers paying more than they should. (ABC News)

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If you live in an apartment block with an embedded power network, you are probably paying too much for your electricity.

Key points:

  • A new study shows that customers on embedded networks generally pay higher electricity bills
  • Embedded networks are used in multi-resident complexes such as apartments, retirement villages and caravan parks
  • A contractor or owners corporation buys power in bulk and on-sells to individual residents

A new study by the Victoria Energy Policy Centre, commissioned by the Victorian Government and released exclusively to 7.30, has found customers on embedded networks in Victoria are paying up to $439 a year more than the best deal they could get if they were able to switch retailers.

A typical customer on an embedded network could reduce their bill by 36 per cent if they were able to switch to the best deal on the market.

An embedded network is a set-up that supplies power to a site with many homes, such as an apartment block, retirement village or caravan park.

The electricity running through a main meter before reaching each household.

‘Done out of a considerable amount of money’

Pensioner Mary Preston, 73, has lived at Gateway Lifestyle Stanhope Gardens in Sydney’s north-west for the past 31 years.

She is no longer happy living in the over-50s community and is considering finding somewhere else to live.

That is because she and other residents at Stanhope Gardens have been massively overcharged for electricity by the community’s operators.

Mary Preston wears a blue and white top

PHOTO: Mary Preston fought to get a refund on her electricity bill. (ABC News)

“The park has overcharged me in total $1,536,” Ms Preston said.

“They’ve overcharged many other residents much more.

“Many of us have been done out of a considerable amount of money.

“We are not able to change our provider — we don’t have any choice.

“We buy our electricity from the park operator.”

Earlier this year the New South Wales Civil and Administrative Tribunal ruled that Ms Preston and 92 of her neighbours at Stanhope Gardens were entitled to a refund totalling $78,521.

But the residents say they are owed almost twice that amount, and have lodged an appeal which will be heard next month.

“We’ve had to fight very hard to get justice,” Ms Preston said.

The residents are locked into an embedded network.

Embedded networks give controller monopoly

VIDEO: What is an embedded network? (ABC News)

In an embedded network, a contractor or owners corporation is in charge of the main meter, meaning they can buy electricity in bulk and on-sell the power to residents.

In theory, residents on embedded networks should get a better deal, thanks to bulk buying their power.

But that often is not the case, because whoever runs the private network has an effective monopoly.

“It’s becoming so difficult now … it’s really starting to affect my health,” Ms Preston said.

*“I don’t think this is fair, they are huge companies against an individual like me, and they’ve put me in a near impossible position.”

*The owners of Stanhope Gardens, Gateway Lifestyle, declined an interview with 7.30, but provided a statement.

“Refunds have been paid to home owners at Stanhope Gardens in accordance with orders made by the NSW Civil and Administrative Tribunal as a result of substandard legislative drafting,” the statement said.

“The drafting error in the legislation, which was acknowledged by the Supreme Court of NSW, has created a practically unworkable law.


“Despite the uncertainty posed by the legislation, the operator of Stanhope Gardens was one of the first to proactively update its charging method in light of the Supreme Court’s ruling.”

Embedded networks covered by different rules

Head shot of Jake Lilley in front of a blurry brown background

PHOTO: Jake Lilley says customers on embedded networks don’t get the same service or assistance as regular consumers. (ABC News)

*The Consumer Action Law Centre said embedded networks were responsible for some of the worst complaints it had dealt with.

*Because the private contractors running embedded networks are not covered by the same rules and regulations as energy market retailers, customers have less protection.

“People in embedded networks are second-class energy citizens,” Jake Lilley of the Consumer Action Law Centre told 7.30.

“For instance, if you’re in a really dire scenario where you can’t afford to pay, you don’t receive the same sorts of assistance a normal energy retailer would have to provide.

“You also don’t have the same price regulation as other people, so you may be paying $300 or $400 more.”

The Australian Energy Market Commission has quoted estimates of at least half a million customers on embedded networks.

This year the commission recommended changes to the rules governing embedded networks.

Mr Lilley said a lot of people may have no idea their electricity is supplied through one of these networks.

“In some instances it looks like a normal retailer that you’re signed up with, and they wouldn’t realise until a dispute arises,” he said.

“We’ve heard of some of the suppliers that act as agents in this space laughing in people’s faces when they threaten switching suppliers.

Residents selling to escape networks

Fred Perera wears a grey T-shirt.

PHOTO: Fred Perera’s power bills are high, but he cannot get a better deal because of the embedded network. (ABC News)

At the Brunswick Heart apartment complex in Melbourne’s inner north, residents were signed up to an embedded network before they even moved in.

Fred Perera lives by himself in a one-bedroom apartment and is rarely at home.

Despite this, his electricity bills are sky high.

“I got told that my building has an embedded network for electricity and gas after I signed my lease, and I was like, ‘What is that? I don’t know what that is’,” he told 7.30.

“They were saying that they’d be able to give me a better deal on electricity.”

One recent bill was $223 for just two months.

Mr Perera tried to switch his electricity supplier, but could not because he cannot access the meter number for his apartment.

“So some of my neighbours have been frustrated enough to sell up and leave, or just, you know, break their leases and leave where they live because of just how expensive it is and how frustrating it is that they can’t switch away,” he said.

The owners corporation has been trying to switch electricity suppliers for the entire building for the past year.

The embedded network provider at Brunswick Heart, OC Energy, and its new owner Origin Energy, both declined an interview with 7.30.

In a statement, Origin told 7.30 the residents of Mr Perera’s apartment block were only paying marginally more than the default price set by the Victorian Government.

Networks can have benefits, energy council says

Sarah McNamara wears a red and purple top.

PHOTO: Australian Energy Council chief executive Sarah McNamara says embedded networks can offer good value and take advantage of renewables. (ABC News)

The electricity industry peak body has been aware for some time that better regulation of embedded networks is needed.

“We are aware that there have been some frustrations experienced by customers that feel that the embedded network framework doesn’t allow them enough flexibility,” the Australian Energy Council’s Sarah McNamara told 7.30.

“We simply encourage them to ring their retailer … or ask their strata committee to ring their retailer, and talk to them about whether your embedded network is on the best available deal for your circumstances and your usage.”

She said embedded networks could offer good value and the opportunity for apartment dwellers to take advantage of renewables such as rooftop solar.

“An embedded or shared network does allow the entire building to invest in solar panels, or, for example, perhaps electric vehicle charging stations,” she said.

SOURCE: https://www.abc.net.au/news/2019-10-30/embedded-electricity-networks-energy-customers-paying-too-much/11653730