31 January 2019

Do you charge your long-stay tenants for utilities outside of their rental costs?

Many caravan parks purchase gas or electricity from licensed retailers and use embedded networks within the park to distribute utilities to individual sites. This is known as the on-supply or on-selling of utilities. While a license is usually required to sell gas or electricity, operators of caravan parks are permitted to on-sell utilities under exemption orders administered by Energy Policy WA (EPWA).

The Electricity Industry (Caravan Operators) Exemption Order 2005 allows caravan parks to on-supply electricity to residents and sets out the rules that apply to this practice. The equivalent order for on-supply of gas is the Energy Coordination Exemption Order 2009.

The Residential Parks (Long-stay Tenants) Act 2006 (the RP Act) requires that the long-stay tenancy agreement must specify the amount of any utilities charges or the method by which charges are calculated.

On-supply of gas

If a park operator on-sells gas to long-stay tenants, the exemption order requires the tenant be provided with a bill that includes at minimum:

• The volume of gas supplied to the tenant;
• The volumetric charge for the gas (i.e.: cents per unit); and
• The fees and charges payable by the tenant for the supply of gas services.

Under the license exemption, on-sellers cannot charge residential customers more than the on-seller paid for the gas. Essentially, park operators can only pass on their costs to tenants.

On-supply of electricity

If a park operator on-sells electricity to long-stay tenants, the exemption order requires the tenant be provided with a bill that includes at minimum, the quantity of electricity supplied and the fees and charges to be paid by the tenant.

Can I charge a meter reading fee?

In most cases, no.

In regards to the weekly “meter fee” it is the Department’s view that a meter reading charge can only be imposed under the following conditions:

• The meter reading fee is in the long-stay tenancy agreement and written as a meter reading charge;
• There is no daily supply fee included in the electricity cost to the tenant; and
• Where there is no daily supply fee, the meter reading charge is no more than the daily supply charge that would be charged by the supplier.

As an example, the 2017 daily supply charge was: 45.15c per day x 7 days = $3.16 per week.

If you wish to impose a meter reading fee that is contained in the tenant’s written agreement, it must not exceed the total of the prescribed daily supply charge for the relevant period of time. If the fee has been charged to tenants without a written agreement, or in an amount exceeding the prescribed rate, affected tenants can recover the charges by applying to a court of competent jurisdiction.

Electricity pricing breaks down into two components; a consumption charge and a daily fixed supply charge. Both pricing components are set in by-laws. You can find the current tariff amounts at Energy Policy WA (EPWA).

The daily fixed supply charge is intended to cover the on-seller’s costs of providing electricity services, which includes activities like reading the meter and preparing the customer’s bill. An on-seller is therefore not allowed to charge for those items separately.