Cowell Electric Supply Pty Ltd - Prepayment metering data analysis

Background

Prescribed customers are residential customers in the remote Aboriginal communities and associated homelands of Anangu Pitjantjatjara Yankunytjatjara Lands, Yalata and Oak Valley who did not, prior to 1 July 2022, pay for electricity. These customers are provided with electricity by Cowell Electric through the Remote Area Energy Supply scheme (RAES), administered by the Department for Energy and Mining (DEM).

The Essential Services Commission (Commission) regulates the use of PPM in non-National Electricity Market networks in South Australia through the Prepayment Metering System Code (Code). However, as the Variation Regulations prescribe prepayment as the only payment method for prescribed customers, some of the standard Code PPM consumer protections cannot practically be provided for these customers (for example, the ability to revert to a postpaid arrangement).

When the Variation Regulations were made, stakeholders raised concerns about the mandatory nature of PPM for prescribed customers and the impacts that implementation of the policy may have on support services in the relevant communities.

Within the provisions of the Variation Regulations, the Commission established a range of minimum consumer protection terms and conditions for the PPM sale of electricity to these customers. Those are set out in Schedule 2 of Cowell Electric’s licence, and include:

• Ensuring that key information about rights, responsibilities, and meter operating instructions be provided in languages relevant to customers (such as Pitjantjatjara).
• Setting a maximum cap of 30% of any monetary top ups to repay emergency and/or friendly credit debt, with a customer able to choose any amount below that cap as they consider appropriate.
• A definition of life support customer that reflects the needs of the local communities, with flexible registration requirements, and a prohibition on disconnection of life support customers.
• Strengthening reporting requirements to improve transparency. 

Cowell Electric’s Reporting on Prepayment Metering

Cowell Electric’s quarterly reporting on prepayment metering metrics commenced at the end of October 2022. The most recent quarterly data report was received by the Commission on 27 July 2023, with some additional data and clarification of that data having been obtained in the period up to the publication of this report. Cowell Electric was required to report against the metrics listed in Table 1 on a quarterly basis, including data ‘as at’ the end of each month.

The metrics were developed with the benefit of advice from consumers, consumer and industry representative groups and academic bodies through a public consultation process, are detailed in Table 1 below.

Prescribed Customers

In July 2022, when PPM was first rolled out to the Pukatja community (formerly Ernabella), there were 76 customers. By the end of quarter 4 (Q4), it was reported that there were 392 customers over the Pukatja, Mimili, Pipalyatjara, Amata, Indulkana (Iwantja), Yalata, Oak Valley and Kaltjiti (formerly Fregon) communities. 

Figure 1 – Number of prescribed customers per community as at 30 June 2023

Prescribed customers analysis

There are approximately 60 additional customers across five communities (Kalka, Kanpi, Nyapari, Watanumi, Yunyarinyi) scheduled to be connected to PPM over the next 12 months, under the Variation Regulations. 

If a prescribed customer, or authorised medical practitioner advises that a customer residing at the supply address requires a life support system, Cowell Electric is required to prevent a life support customer’s prepayment meter from disconnecting. 

In the data provided by Cowell Electric, 31 customers from the various regions notified that they were life support customers. Nineteen of those have been registered for life support, with the applications of the remaining 12 still being verified.

The consumer protections for prescribed customers who have applied for life support are outlined in schedule 2, clauses 1.10.1 and 1.10.2 of Cowell Electric’s licence, which provide that the disconnection feature must be disabled once notified and allow the life support customer 50 business days or 10 calendar weeks to submit medical confirmation to become a registered life support customer. If a customer seeks an extension of time to provide medical confirmation, Cowell Electric is required to provide to the customer an additional 25 business days or five calendar weeks.

Cowell Electric has advised that all 31 customers who notified they were life support customers have had the PPM feature turned off their meters and are currently paying their electricity via post pay. Cowell Electric has indicated that individual consideration will be provided to those who do not provide the necessary evidence to be registered for life support, or if they revert back to PPM.

How often are customers accessing emergency/friendly credit options?

Customers must top-up their balance through a specified payment method and maintain a credit balance to continue receiving electricity. For prescribed customers, if they do not top-up their credit before it is exhausted, then friendly credit or emergency credit is provided.

Emergency credit is accessible to customers when the normal credit on the PPM has been exhausted during a default disconnection time. Default self-disconnection times are between the hours of 10.00am and 3.00pm on weekdays except public holidays. If disconnection occurs outside of these hours, then friendly credit is applied.

When a prescribed customer owes a friendly credit or emergency credit, these amounts must be paid back. This can be done through a payment splitting arrangement, which enables an agreed proportion of a customer's top-up (not more than 30%) to be used to pay any debt while ensuring the electricity is still connected.

If the prescribed customer owes a debt that is not a friendly credit debt or an emergency credit debt, this must not be recouped via a payment splitting arrangement.

The number of customers accessing emergency credit increased in Q4 for most communities, particularly in May and June, with increases reported of two to three times that reported for April. 

Communities that had their PPM switched on in quarter 1 (Q1) and demonstrated high levels of access to emergency credit/friendly credit for that period, also reported similarly high totals in Q4.

Figure 2 – Number of times payment splitting, emergency credit and friendly credit was accessed per 100 customers in 2022-23

The data for figure 2 has been normalised (per 100 customers) to achieve a standardised data set to account for the material increases in customer numbers that occurred throughout 2022-23.

The number of times customers accessed friendly credit followed the same pattern as customers who accessed emergency credit, significantly increasing in May and June. Friendly credit figures are expected to be higher than emergency credit due to it being applied during weekend hours and after 3pm each day.

For the communities that have been part of the PPM system from 2022, payment splitting numbers remained consistent for quarters 2 to 4 after reporting higher numbers in Q1. The exception was Pipalyatjara, which reported twice as many customers using payment splitting for the last quarter (eight customers). Six of those eight customers were reported to have used payment splitting in June.

Of the newer communities, both Indulkana and Yalata reported an increase in customers using payment splitting by the end of the Q4.

Self-disconnections

How often are customers self-disconnecting and for how long?

If the customer does not top-up prior to the emergency credit being exhausted, their energy supply will be disconnected. This is termed ‘self-disconnection’. 

To be reconnected, the consumer must make a payment that brings their balance back into credit. Under current regulatory arrangements, self-disconnection can only occur during default disconnection periods, currently these periods are 10am to 3pm Monday to Friday, except public holidays. Where a prepayment customer’s emergency credit expires outside of these times, the customer’s smart meter will begin using friendly credit to enable their energy to remain connected until a default disconnection period commences or they return their balance to credit.

A review of data for all quarters indicates the highest concentration of self-disconnection rates occurred during the first months of the PPM rollout for all communities, and again in the fourth quarter. 

Figure 3 – Number of self-disconnections per community in 2022-23

Self-disconnections per community

Figure 3 shows the total number of self-disconnections per community, which shows that all communities except for Oak Valley had an increase in self-disconnections in the last quarter. The reason for this is not clear, though one feature of Oak Valley is its lower customer numbers.

The Commission’s upcoming review on these matters will include consideration of the extent to which additional information might assist to identify the drivers for self-disconnections. 

Figure 4 – Number of self-disconnections per 100 customers in 2022-23

Figure 4 shows the number of self-disconnections per 100 customers by month and the number of instances per 100 customers that a customer experienced more than three disconnections lasting longer than four hours.

The average duration of self-disconnections in minutes has been reported monthly by Cowell Electric. Although the duration of disconnections in Q4 was slightly lower overall, there were no strong trends observed.

Timeframe of disconnections

Figure 5 shows that 64 percent of self-disconnections were for less than 4 hours. 

In addition, eight percent of self-disconnections were reported to have had a duration of greater than 24 hours. 

Figure 5 –Length of time of each self-disconnection in 2022-23

Instances of greater than three self-disconnections

As demonstrated in figure 6, the number of self-disconnections longer than 240 minutes in a 3-month period increased in Q4 for almost all communities, particularly in May and June. This metric was reported two to three times more than what was reported in April (and Amata community reporting a five-fold increase, from 5 in April to 25 in June). 

Figure 6 – Instances of greater than three self-disconnections longer than 240 minutes in a 3-month period in 2022-23

Consumption data

The Commission requested from Cowell Electric details of consumption data for 2021-22, to determine if there are any consumption trends developing following the commencement of charging (for the first time) and the implementation of PPM.

Figure 7 shows monthly consumption for the corresponding months where PPM was rolled out in those regions. For example, as Kaltjiti had PPM rolled out in May 2023, only consumption data from May and July 2021-22 and 2022-23 were included. The purpose of doing this was to compare consumption for those months where PPM was rolled out and compared to the consumption usage prior to the meters being installed where possible - noting that consumption where the regions joined PPM mid-month have not been excluded.

Overall consumption was approximately 117,000 kWh lower for PPM than when comparing corresponding months and regions for the previous year. However, it is too early to determine what impact, if any, PPM has had on consumption in the regions. 

Figure 7 – Total consumption (kWh) for months with PPM

Appendix data

Prescribed Life Support Customers as at 30 June 2023

Self-disconnections

>3 self-disconnections >240mins in a 3-month period

Payment Splitting

Emergency Credit

Friendly credit