Energy company promised pensioner a refund then sent debt collectors after him | 7.30

Key Concepts

• Loyalty Tax: The practice of energy companies increasing prices for long-term customers who don't actively shop around for better deals.
• Buyer Beware: The principle underpinning the Australian energy market design, placing the onus on consumers to find the best deals.
• Peak Power Price: The higher rate charged for electricity usage during periods of high demand.
• Energy Ombudsman: An independent body that investigates complaints about energy providers.
• Consumer Duty: A proposed regulatory change requiring energy companies to act in the best interests of their customers.

Overcharging and Billing Issues with NG Energy

The report details the experience of 85-year-old Bill Nedf, a South Australian resident, who was significantly overcharged by energy provider NG over a four-year period. Initially, NG claimed Mr. Nedf owed them $1,120, despite him having 30 solar panels installed to offset electricity costs. This followed an initial admission of overcharging him by over $10,000. Mr. Nedf described the situation as deeply unsettling, stating, “I thought I was up with the fairies.”

Escalation and Resolution Attempts

Mr. Nedf’s daughter, Fiona, assisted in challenging the bills, highlighting the inconsistencies and lack of clear explanation from NG. She noted the difficulty in understanding the paperwork and the constantly changing answers provided by NG representatives. In mid-2022, NG increased its peak power price by over 70%, escalating from 43 cents per kilowatt hour to 75 cents, and further to 83 cents per kilowatt hour in 2024. Fiona described NG’s actions as “ruthless” and pointed to numerous online complaints from other customers.

After escalating the issue to South Australia’s energy and water ombudsman, the bill was reduced to $280. However, Mr. Nedf ultimately refused to pay, stating, “I don’t owe them any money. They say I owe the money…and I’m going to sit on my dig and say, ‘I don’t owe you that money.’” He expressed a loss of faith in the entire energy system due to the ordeal. Eventually, NG conceded owing Mr. Nedf $2,500, but he seeks a full explanation for the errors.

NG’s Performance and Regulatory Issues

NG, a French-owned energy giant, has a history of poor performance and regulatory breaches. The 2025 National Retailer Report identified NG as the worst-performing retailer in the country. In November of the previous year, the company was fined $1.22 million in Victoria for failing to respond to complaints promptly. In August, NG was forced to repay up to 3,000 South Australian customers due to overcharging. South Australia’s Energy Minister, Tom Koutsantonis, has referred NG to both the ACCC (Australian Competition and Consumer Commission) and the Australian Energy Regulator due to its billing practices and customer service. He stated, “The way they’ve conducted themselves…the way they’ve treated their customers…is substandard.”

NG issued a statement attributing the errors to “human error” and claiming to have made changes to staffing, training, and customer processes.

The "Loyalty Tax" and Market Design

The report highlights the concept of a “loyalty tax” in the energy market, where companies gradually increase prices for loyal customers who don’t actively compare deals. Professor Ron Ben David, former chair of the Essential Services Commission in Victoria, explained that the current market is designed on the principle of “buyer beware,” placing the responsibility on consumers to find the best deals. He argues this model is flawed, stating, “I don’t believe that model works in the energy market.”

Consumer Awareness and Regulatory Reform

The ACCC’s latest electricity inquiry report found that 73% of Australian households are not on the best value electricity deal available. The report emphasizes the importance of consumers actively contacting their retailers and asking, “Am I on the cheapest possible contract that you have available right now?” Professor Ben David advocates for a “consumer duty,” a regulatory change that would require energy companies to act in the best interests of their customers. Mr. Nedf regrets not checking his bills more closely but questions why consumers should have to be constantly vigilant, asking, “Why can’t you trust your retailer?”

Logical Connections

The report establishes a clear connection between NG’s poor performance, the flawed market design based on “buyer beware,” and the resulting financial harm to consumers like Bill Nedf. The case study of Mr. Nedf serves as a concrete example of the systemic issues within the energy market and the need for regulatory reform. The perspectives of both the energy minister and Professor Ben David reinforce the argument for a more consumer-centric approach.

Data and Statistics

• Overcharge Amount: Bill Nedf was initially overcharged over $10,000 over four years.
• Peak Power Price Increase: NG increased its peak power price by over 70% between mid-2022 and 2024 (from 43 cents/kWh to 83 cents/kWh).
• ACCC Finding: 73% of Australian households are not on the best value electricity deal.
• NG Fine: NG was fined $1.22 million in Victoria for poor complaint handling.

Conclusion

The case of Bill Nedf illustrates the vulnerabilities of consumers within the current Australian energy market. The report underscores the need for increased consumer awareness, proactive bill checking, and, crucially, regulatory reform to shift the responsibility from “buyer beware” to a system that prioritizes consumer protection and fair pricing. The proposed “consumer duty” represents a potential solution to address the systemic issues highlighted in the report and restore trust in the energy sector.