16 September 2021

Passing on electricity usage and supply costs to tenants

Due to the nature and set-up of residential parks, it is common for park operators to on-supply electricity by on-selling the usage and supply costs to tenants. This bulletin aims to explain some of the on-selling requirements.

What is the on-supply of electricity?

The on-supply of electricity is when an entity, such as a park operator, purchases electricity from a licensed supplier, such as Synergy or Horizon Power, through a master meter. This operator may on-sell the electricity to its residential customers, being the park’s long-stay tenants, under the Electricity Industry (Caravan Park Operators) Exemption Order 2005 (Exemption Order).

Calculation of a tenant’s consumption costs

Essentially, the terms and conditions of a long-stay agreement determines the method a park operator will use to calculate a tenant’s electricity consumption and supply costs.

One method to calculate a tenant’s contribution is through the use of a sub-meter, if available at the long-stay site. A reading of the sub-meter will determine the actual electricity consumption for the individual site. If registered, the sub-meters may be read by the licensed supplier and appear on the account sent to the park operator. The consumption cost can be directly passed on to the tenant.

If the sub-meter is unregistered, the operator will do their own reading of the sub-meter and calculate the tenant’s charge using the respective electricity tariff costs.

For properties without a sub-meter, the long-stay agreement must have a clause that outlines the calculation method that applies for the supply of electricity within the park. This may simply set out a tenant’s contribution as a fraction of the total number of long-stay sites in the park. For example, in a park with ten long-stay sites, each tenant may be responsible for one tenth of the total electricity costs charged by the licensed supplier, regardless of actual consumption by individual tenants.

However, even if the long-stay agreement specifies a method, there are some limits to the amount an operator can charge a tenant for consumption under the Exemption Order. When Synergy or Horizon Power supplies the electricity, the Exemption Order limits the amount that can be charged to a tenant to the standard residential consumption tariff, being the A1 (Synergy) and A2 (Horizon Power) tariff rates. These tariffs are available on Energy Policy WA’s Household electricity pricing page.

If another licensed retailer supplies the electricity, the cap on consumption costs does not apply.

If the on-seller generates the electricity, such as in the case of solar, the cap is whatever amount is necessary to recover the cost of generation of the electricity.

Calculation of electricity services costs

Charges for electricity services differ from consumption charges. Electricity services are defined in the Exemption Order and include the supply, maintenance and reading of a meter for the measurement of electricity supplied to a property, as well as the preparation and issue of electricity supply accounts.

If the park is located within a Synergy or Horizon Power licensed area, the operator can only charge a tenant the A1 and A2 tariff daily supply charge. This is regardless of which licensed entity supplies electricity to the park.

If the park is located outside of a Synergy or Horizon Power licensed area, there are no restrictions on what can be charged. Information on the distribution, supply and sale of electricity, and licensed areas maps in Western Australia is available on Energy Policy WA’s Electricity industry page.

Electricity service costs that an operator cannot charge to tenants

Under the Exemption Order, the electricity service cost includes administrative activities, such as reading the meter or preparing accounts. This means that the operator cannot pass on administrative costs, such as a meter reading cost, to tenants who are already being charged the A1 or A2 electricity service costs.

Electricity service costs that an operator could charge to tenants

While the licensed supplier might only charge the operator a single amount for the daily supply charge, the Exemption Order allows the operator to charge each tenant individually the daily residential supply tariff. This means that an operator may receive multiple payments for the total daily supply charge.

A long-stay agreement may however, include a clause that limits the ability of the operator to pass on the full daily charge to each tenant.

Information an operator must provide each tenant

The Exemption Order states what information an on-seller must supply to its customers. For an operator, this information must:

• be easily accessible, such as by placing the information on a noticeboard that all tenants have access to, or sending notices to each tenant;
• include the quantity of electricity supplied to the tenant; and
• include the fees and charges the tenant must pay for the usage and supply of electricity.

More information

The Economic Regulation Authority’s Switched On: Energy Consumers Guide contains information on how energy, including electricity, is supplied to properties.

In the first instance, talk to your park operator who should be able to explain the on-supply arrangements for your park.

If you have a Park Liaison Committee, approach them, as they are also a valuable means of resolving a range of matters through on your behalf with the park operator.

If you have any queries or concerns about how the on-selling of electricity is disclosed in your long-stay agreement, please contact Consumer Protection’s Contact Centre on 1300 304 054.

The Energy & Water Ombudsman provides a free and independent dispute resolution service between energy customers and licensed suppliers when they have been unable to resolve an issue themselves. Contact them on 1800 754 004