“Back bills” – invoices for past electricity use that wasn’t correctly charged at the time – are a regular cause of complaint.

The Electricity Authority’s minimum terms and conditions state companies may invoice consumers for past underpayments “but only to the extent reasonable”. The company also has to take into account whether it or the consumer contributed to the error, or could reasonably have been expected to know of it.

Yet many companies’ contracts hold the consumer responsible for underpayments, regardless of who was responsible for the mistake.

  • Meridian Energy says that if it makes an error and undercharges you, you’ll still have to pay the full amount. Contact Energy and Empower (owned by Contact) similarly claim you’ll be liable for the correct amount.
  • Energy Online states if it’s undercharged you for more than 24 months, it will “only recover” the amount it should have charged for the first 24 months of that period. That’s little consolation – you could still be stung with a huge bill through no fault of your own.
  • Just Energy, Mercury Energy and Pulse Energy say if you’ve been undercharged for more than two months, they’ll recoup only two months’ worth of the correct charges. But this isn’t the same as limiting their rights to recover what’s “reasonable”, especially if they caused the billing error.
  • Bay of Plenty Energy, Nova Energy and Tiny Mighty Power don’t have any provisions in their contracts for how they deal with invoicing errors.

 

The case of Mr J


Mr J got an unexpectedly large electricity bill. The company initially told him it was a “computer error” but later gave a different explanation. When he complained, it offered to reduce the amount by 50 percent. Mr J wasn’t convinced he should have to pay and went to the Electricity and Gas Complaints Commissioner.

The Commissioner found the company had made several errors – including opening an account for Mr J at the wrong address, a mistake it didn’t identify for four months. It had also been sending estimated bills for eight months, despite Mr J letting the meter reader into his house to read the meter. As a result of the investigation, the company offered to waive the entire bill.

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