Independent 5-year review of Utilities Disputes Limited
Recommendations from the review and otherproposed changes
Consultation Paper for Round Two
Prevent.Educate.Resolve.
Contents
1.Introduction and background to the Five Year Independent Review
2.The review – overall conclusions
3.First round of consultation
4.The Board’s approach for round two
5.Documents and information about Utilities Disputes and schemes it operates
6.Process and proposed timetable
7.Closing date for submissions
8.Making submissions
9.Review recommendations requiring changes to the Scheme documents
(a) Accountability (review part 7.4)
(b) Natural Justice (review part 7.7)
(c) Performance Standards (review part 13)
(e) Land Complaint exclusions (review part 16)
10.Other Proposed changes
10 (a) Mechanism to ensure Utilities Disputes can refer, and, where appropriate, consider complaints about providers without delay
11.Next steps
12.Appendix 1 – Questions for submitters
13.Appendix 2 – Land complaints exclusions paper
1.Introduction and background to the Five Year Independent Review
The Utilities Disputes Board(the Board) is seeking submissions on its proposals to amend the Energy Complaints Scheme documentsto implement recommendations from the Five Year Independent Review (the review).
Queen Margaret University Consumer Dispute Resolution Centre conducted the review of the Energy Complaints Scheme in 2017. This review was conducted in accordance with the Electricity Industry Act 2010, Schedule 4, Clause 15, which states:
“The provider of the approved scheme must ensure that, at least once every 5 years, an independent review of the scheme is carried out and the report of the review is provided to the Minister within 3 months of its completion.”
The review states:
“This report outlines the findings of the Five Year Independent Review of the approved Energy Complaints Scheme provided by Utilities Disputes but also includes a wider review of Utilities Disputes Limited. At the time of the review, as the only scheme provided by Utilities Disputes relates to energy complaints, for ease of reading and reporting reference is made to Utilities Disputes only.”
The review was completed in July 2017 and provided to the Minister of Commerce and Consumer Affairs, as required. The previous Minister was unable to consider the review before the general election and change of government. The review was discussed with the new Minister, the Hon Kris Faafoi in January 2018.
2.The review – overall conclusions
The review’s overall conclusion was that “Utilities Disputes is an effective dispute resolution scheme. To maintain its effectiveness into the future, the review has highlighted a number of areas for further development.”
The review also noted “with only a few minor exceptions, Utilities Disputes meets the requirements of the Key Practices for Industry-based Customer Dispute Resolution.”
The review noted there was room for improvement and detailed the areas it believes this needs to occur.
A full copy of the review and its recommendations is availablehere.
3.First round of consultation
The first round of consultation closed on 6 April 2018. The Board has considered submissions from 25 stakeholders and,having taken account of those views, has decided to undertake round two consultation on a set of more specific proposals. The Board has produced this consultation pack for round two of consultation.
A full copy of submissions from round one of consultation are available here.
4.The Board’s approach for round two
For round two the Board seeks views on its proposed approach to the review’s recommendations, and the information contained in this paper. The Board’s proposed approach takes into account the submissions received in round one.
The Board seeks feedback from members of all schemes as well as stakeholders and the wider communityon the specific proposals set out in this consultation paper and the associated information pack. This is also an opportunity for members of all schemes as well as stakeholders and the wider community to provide Utilities Disputes with further relevant factual information on the proposed changes, and to correct us if we have misunderstood anything.
In relation to the proposed changes to land complaint exclusions aninformation paper has been prepared to assist with the consultation process and help engagement. The information paper summarises some of the issues and information relating to land exclusions, andthis can be found at Appendix 2.
The Board will consider submissions received in round two before making final decisions and deciding next steps, including what, if anything, to propose to the Minister by way of changes.
5.Documents and information about Utilities Disputes and schemes it operates
For further information about Utilities Disputes, see the Utilities Disputes website here.
To access the relevant scheme documents for the Energy Complaints Scheme, available on the Utilities Disputes website see here.
6.Process and proposed timetable
Table 1 below outlines the process and proposed timetable for consultation.The Board proposes two rounds of consultation.
The questions are listed in each section. Appendix 1 contains a full list of questions and is the preferred form for submissions.
Table 1 – Indicative timetable for proposed changes
Date (week beginning) / Activity28 May / Second consultation round opens
4 June / Second consultation round continues
11 June / Second consultation round closes (Friday 15 June)
18 June – 6 July / Board to consider submissions from second consultation round
9 July / Board votes on proposed changes and gives notice to Minister of Commerce and Consumer Affairs and Energy Complaints Scheme Providers
20 August / Any changes adopted by the Board and approved by the Minister become effective
7.Closing date for submissions
The closing time and date for submissions for the second consultation round is 5 pm on Friday 15June2018. Please note late submissions are unlikely to be considered.
8.Making submissions
Please send submissions in Microsoft Word format to:
.
PostPO Box 5875, Wellington 6140
When submitting, please use the preferred form for submissions in Appendix 1. Submitters should indicate any documents attached in support of their submission in a covering message.
The Board may make submissions available on the Utilities Disputes website. If submitters provide any information on a confidential basis, please clearly show this in a coveringmessage.
If you have any questions during the consultation process, please contact James Blake-Palmer either by email or phone 04 9144537.
All submissions will be acknowledged. If you do not receive an acknowledgement within two working days, please contact James.
9.Review recommendations requiring changes to the Scheme documents
The review recommended scheme document changes to ensure Utilities Disputes and its schemes continueto meet the principles of accessibility, independence, fairness, accountability, efficiency and effectiveness.
As noted above, the review made recommendations about other aspects of Utilities Disputes requiring rule changes. Given this, the Board is consulting with members of all schemes as well as stakeholders and the wider community.
This section sets out those recommendations, provides a summary of stakeholder feedback from round one of consultation, gives the Board’s round two proposals for further consultationand poses questions to help the Board’s consideration.
Following the layout of the review, the recommendations below are set out under the relevant principle or area of the scheme document.
(a) Accountability (review part 7.4)
Review recommendation and Board’s initial view:
The review recommended the Board consider following the example of the Electricity Authority and name the relevant providers in its case notes. The Board disagreed with this recommendation and considered it more appropriate to name providers in breach of scheme rules and guidelines. Round one of consultation asked submitters to comment on the proposals of the review and Board.
Submissions from round one of consultation:
Predominantly community type organisations supported naming providers in case notes, citing increased transparency and incentives on providers to improve. The majority of submitters were against naming providers in case notes, noting: this wouldn’t add to the purpose of a case note; is problematic regarding privacy and where the company isn't the subject matter of complaint rather just handling it; confidential settlements, and fairness for providers with fewer complaints.
The Electricity Authority noted the review’s reference to its own process was based on a misunderstanding.
More submitters were supportive of naming providers who breached scheme rules, but many providers did not believe providers that breach guidelines should be named. Many submitters believe a provider could operate outside of guidelines but still meet their obligations under the scheme rules. Many submitters considered the existing process for non-compliance (escalation to a higher level in the provider’s organisation and, ultimately, reporting non-compliance to the Minister)to be adequate, and some suggested if there was a problem with this process it needs to be addressed as a first step.
Board’s current view
After considering the submissions to round one of consultation the Board considers providers should not be named in case notes. The Board considers providers who breach scheme rules should be named and it can already name providers that breach the scheme rules.The Board intends to retain this. The Board considersproviders who breach any scheme guidelines should only be named if in doing so the provider has breached scheme rules.
(b) Natural Justice (review part 7.7)
Currently natural justice is included in the principles section of the Energy Complaints Scheme document. Natural Justice was included in the 2016 changes at the request of a provider.
Review recommendation and Board’s initial view:
The review suggested the Board consider removing the principle of ‘natural justice’ from its scheme document. The Board agreed with this recommendation, noting the principle of fairness covers ‘natural justice’, so its inclusion is unnecessary. The consultation paper asked submitters whether they supported removing ‘natural justice’ from the principles.
Submissions from round one of consultation:
Submitters were overwhelmingly in favour of retaining ‘natural justice’ in the scheme rules. Many submitters believed if natural justice was removed it was a signal that Utilities Disputes was lessening its accordance with the principle. Many submitters believe ‘natural justice’ is different to ‘fairness’ and includes more of a procedural element not necessarily captured in ‘fairness’, which may focus more on fairness of outcome.
Board’s current view:
The Board wishes to assure stakeholders that it always intended Utilities Disputes to act in accordance with the principle of natural justice. The Board is now intending to retain the explicit reference to natural justice in the scheme rules due to the overwhelming support received for doing so in submissions.
(c) Performance Standards (review part 13)
Review recommendation and Board’s initial view:
The review suggested the performance standards relating to the self-reporting of compliance and cost per case should be removed. The Board supported these measures being removed. Submitters we asked whether these measures should be removed and what other measures the Board could consider adopting.
Submissions from round one of consultation:
There was some confusion with some submitters believing the reviewer intended for the Board to remove the self-reporting requirements altogether. To be clear, this is not the case; the reviewer means to remove self-reporting on compliance requirements as a measure of Utilities Disputes' performance.
Submitters were overwhelming in support of removing the performance standard relating to cost per case. Many submitters noted the current performance standards should not be removed until other standards have been developed. Some submitters suggested provider and complainant satisfaction could be surveyed regularly and included in a performance measure.
Board’s current view:
The Board believes the performance standards relating to cost per case and self-reporting of compliance should be removed from the scheme rules. The Board wants to assure stakeholders these will not be removed until new performance measures have been developed.
The Board also notes it will still continue with self-reporting of compliance, and Utilities Disputes is completing regular satisfaction surveys of providers and complainants.
(d) Levies (review part 14)
Review recommendation and Board’s initial view:
The review made a number of recommendation about levies:
- Every organisation which is covered by the Scheme should make a contribution to its running costs.
- There should be no cross-subsidisation of providers, nor sweetheart deals. Thus, the levy arrangements for Transpower and First Gas should be revisited.
- The fixed element should cover all costs incurred by Utilities Disputes excluding those solely related to the handling of individual complaints.
- In keeping with the ‘user pays’ principle, any case reaching Utilities Disputes at deadlock should incur a fee.
- The current variable fee structure needs to be reconsidered.
The Board refrained from providing a view on the review’s recommendations during round one of consultation, rather seeking views of submitters through consultation questions to assist in forming its view.
Submissions from round one of consultation:
Submissions to round one of consultation showed general satisfaction with the current levy system. Most submitters were open to considering options for levy changes and many submitters suggested minor changes to the levy system. Submitters asked for due consideration to be given to the levy design process and asked for further consultation on levy proposals.
Board’s course of action
The Board has seen enough evidence from submissions to give further consideration tooptions for reviewing the levy system. The Board has decided not to consult further on the levy options at this stage and will be modelling and testing different options suggested in the review and submissionsin round one before seeking further input.
More information, including a proposed timetable for further input will be made available closer to the time.
(e) Land Complaint exclusions (review part 16)
In round one of consultation the Board sought views from submitters on the independent review’s recommendation the exclusions be removed. The Board was particularly interested in hearing submitter’s views on the impact of removing the exclusions, with a request for details and examples where possible.
Submissions received were mixed, with some strong views against removing the exclusions, and some wanting more information before being able to form a view. Some submissions highlighted misunderstandings about how the exclusions operate in practice, for example, how the impact on the provider of any outcome affects the claim limit of $50,000.
Some submitters voiced concerns about the adequacy of proposed safeguards , such as the opportunity providers get to resolve the complaint, the claim limit, the discretion to decline to consider a complaint (if frivolous or vexatious) the test case mechanism and the requirement that Commissioner determinations are based on what is fair and reasonable for both parties.
The Board encourages submissions in round two to include detailed thoughts on these and other safeguards, and their impact on the viability of the exclusions — including any further factual information that may be relevant to the Board's consideration of this issue.
. The attached information paper (Appendix 2) has been prepared to assist with the consultation process and help engagement on this issue in particular bysetting out more background information on exclusions.
Following round two, the Board will make a decision on whether or not to ask the Minister to remove any or all of the exclusions. The Board will decide based on the information available to it, which will include the review (accessibleusing the link on page 2 above)and submissions received in both round one and two of the consultation process.
The Board encourages submitters to take this opportunity to provide relevant and detailed views incorporating impact and examples and the safeguards. If submitters consider there are anyfactual errors in the information paper, or there is more up to date information available, this would also be welcome.
10.Other Proposed changes
Round one of consultation proposed otherchanges.
The basis for the Board to propose changes for the Energy Complaints Scheme is set out in the General Rules. General Rule 47 states:
“As well as resolving complaints, UDL may carry out activities it may consider appropriate to support its services and with the aim of promoting good practice in relation to handling of Complaints and public confidence in dealing with Providers”
General Rule 48 states:
“these activities may include…reviewing the General Rules, Scheme Rules and Schemes from time to time, to assess whether UDL considers any amendments are appropriate”.
10 (a) Mechanism to ensure Utilities Disputes can refer, and, where appropriate, consider complaints about providers without delay
In round one of consultation the Board sought views in principle on a mechanism to allow Utilities Disputes to refer and consider complaints about providers before they join.
Under the current rules, a ‘Complaint’ can only be made in relation to a ‘Provider’ (which is an organisation providing utilities services that has signed a Provider Agreement). This means that complaints can only be made in relation to members of the Scheme.
For those providers we know about this is not generally a problem, as we approach them and work through the joining process with them usually before we receive complaints. However some participants, for example those operating embedded or customer networks or retailing LPG in cylinders, may not be aware of the membership requirements until we approach them to discuss or refer a complaint.