[deesee2304]

Hi There

Thank you for the replies, 

Being that there is no disclosure of this being a profit source within the community and that there seems to be no compliance with the AER guidelines and the retail laws I am thinking that we should propose a full audit by an independent body as a agenda item in the upcoming AGM.

Would you please suggest any suitable firms you may know of that we could add as suggestions in this submission?

The existing PM bought into the site about 18 months ago, about 6 weeks before ourselves.  The previous owners had both the restaurant and the management rights under the one umbrella and split them in order to successfully find buyers.

My assumption is that the embedded gas system was one of the income sources presented to the current owners when they came in thus their determination to defend their position and keep this as an income source. This is just one example of things that were never set up properly from the beginning of this OC.

We are very concerned that the direction of getting a by-law in place will be a lengthy process, tiresome negotiations and will add up some considerable costs to simply gain a position of saving our business money on a utility bill at the end of the day.  

Thanks again

D.

[deesee2304]

Thank you everybody for your replies thus far – very useful for us.  I can answer some of the questions made to the past two posts to add some clarification:

*The tank is owned/leased from Elgas, The pipes/meters to each lot are owned by common property I think.  The Tank is located on common property

*The Property managers pay for the bulk supply as the tank is filled by Elgas and then bill each lot holder accordingly on usage.  The gas bills are made out under the business name of the property managers.  It is the property managers who are profiting from this as part of their portfolio in the community.

* The property managers are owners of two lots in the scheme and represent one position in the EC.  Their role is twofold – managing the grounds and they also run the accommodation letting business – 35/43 lots are managed as holiday houses as we’re in a coastal location.

*Whether this is legal or not is my deepest concern, the Australian Energy Regulator (AER) states that any business or person on selling energy like this example must have a retail exemption registered: see https://www.aer.gov.au/retail-markets/retail-exemptions 

I have looked closely on this site, they are not listed on the register as an exempt retailer and there is very little compliance to the rules set out in the guidelines.  There are 3 main points in the AER guidelines which I have pointed out the the property managers and the EC to which the response is silent:

            Page 6: Under the Retail Law, anyone who sells energy to people for               use at premises must have either a retailer authorisation, or a retail                 exemption.  

            Page 22: Choice of retailer

            Section 114(1)(b) of the Retail Law states that ‘exempt customers                 should, as far as practicable, be afforded the right to a choice of                     retailer in the same way as comparable retail customers in the same               jurisdiction have that right’. In principle, all customers should be able               to choose their energy retailer. We therefore do not support the                     creation of infrastructure that deliberately reduces a customer’s ability             to exercise choice.

            Page 25 “Exempt sellers who are selling to small, commercial or retail             customers in embedded networks who do not have cost-effective                   access to choice of retailer are also not permitted to charge those                   customers more than the local area retailer’s standing offer.”

The EC have maintained that they are agreeable to us separating from the existing network and gaining our own supply provided that we foot the bill of getting a By-Law drafted about it.  We’re deeply concerned at the costs of what this could come to as they insist on choosing the Lawyer to do the work and are quite unclear about the parameters of what they want the By-Law to entail other than things around the location of tanks on the lot, visual changes, truck access etc.  All these aspects were provided to them by us in our original submission, there was agreement that there would be no changes to the visual aspects as they will be installed hidden in a utility area where skip bins are already stored.  The only other part of the by-law they intend to include from our knowledge is that no other owners would be permitted to change to their own supply should they intend on doing so.

In the last communication made to the EC, I mentioned that if we cannot come to an amicable resolution then we would have no option but to proceed to NCAT to have the matter heard.  The response was that we have a right to do so and suggested that NCAT would most likely back their side and they now intend to contact the insurers of the community title of our intentions and notify all owners in the scheme.

Cheers

D

[deesee2304]

Hi Robert

There is one large LPG tank on the site, the property managers are billed by Elgas to keep it filled and then they on-sell to all lot owners. There is a gas meter on each lot just like for natural gas in a suburban situation.  Being situated on the Mid North coast of NSW there is no natural gas provided in this region, it is all LPG.  It is what is known as an embeded network where they are acting as an energy retailer.  There is some very interesting reading regarding this on the following website.

https://www.aer.gov.au/retail-markets/retail-exemptions

I have raised my concerns of this with both the Property Managers and with the EC but they have failed to even acknowledge any of this! They have blatantly defended their right to make a profit on the on-selling of gas.  

Incidentally I have received quotes of supply from Elgas and Origin, both are very similar and Elgas is the current supplier to the site already.  The rep indicated unofficially that they would be paying the same or similar rates as I am eligible for therefore I would be confident the price difference is simply their margin.

The AER themselves were of little help when I contacted them as they said verbally that they don’t deal with LPG, the NSW based energy ombudsman was the same, however they took the details of my complaint and said they would escalate it as it is not the first time they’ve come across this problem with LPG.  Interestingly all terminolgy within their website and publications there is no reference to LPG not being covered and the blanket term used is just “Energy”.  Legally I don’t see why LPG would not be covered by the same laws.

I strongly feel that the Property managers are particularly defensive about the topic as they would be making a considerable margin for the whole site and the EC seem to be supportive of this scheme.  There is no disclosure to the owners within the scheme of this which I am not sure is legal?

Any advice or suggestions would be greatly appreciated!

Cheers

D

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