During Estimates hearings on Tuesday 30 July 2024, I asked the Director General of the Department of Energy and Climate about the mechanics of the government rebates, paid directly to electricity retailers.
You can read my question and his full response below, or in the official Parliamentary record of proceedings (Hansard) here.
Mr BERKMAN: I want to put a few questions around the administration of the $1,000 electricity cost-of-living rebates. I will direct these to the director-general, if I might. I suppose the first general question is about the mechanism for payment of the retailers. Obviously, they are playing a key role in the administration of the rebate. I am wondering at what point and how the payments to those retailers are calculated and made.
Mr Martyn: Thank you for the question. The department uses the government’s coordinated call centre SSQ to assist us in those engagements. Once the rebates were announced by the government, we engaged with all of the retailers to explore this with them. We have done this in previous years, so the systems and processes are relatively well established. We reimburse retailers for those rebates based on the number of customer households they have.
Mr BERKMAN: Inherent in the notion of reimbursement is that, even if customers are receiving the rebate over a number of payment cycles, that payment only goes to the retailer after it goes to the customer; is that correct?
Mr Martyn: It is important to understand that this year the payment is being made once, so there is only one payment to each household, so one set of payments to retailers.
Mr BERKMAN: In effect, then, any excess payment sits as a credit on the customer’s bill and is, in essence, held by the retailer until such time as the customer spends any residual?
Mr Martyn: Yes, there would be a credit. I want to clarify: the rebate is paid in advance to the retailer based on the number of customers that we believe they have. There may be a true-up if that is different.
Mr BERKMAN: I am interested, then, in a circumstance where a household still needs to be connected to the grid and have a retailer even in circumstances where they are a net generator of electricity and do not themselves pay any electricity—for example, if they have substantial PV generation capacity on their roofs. What happens in those circumstances? Does the retailer just hang on to the rebate at that point? What mechanisms are established for the customer to actually receive the rebate?
Mr Martyn: The scenario you have supplied is that a household has solar PV and its own generation exceeds its own use. I am advised that it is possible for the householder to apply for a refund from the retailer for that amount.
Mr BERKMAN: So we are reliant on the conduct of retailers and their goodwill? To what extent is there a clear and strict obligation about making full and timely refund payments?
Mr Martyn: I would note that the Premier and the minister convened a meeting with retailers only two weeks ago to work through with them their obligations under this scheme. Obviously, the department’s payments to retailers are through a legal instrument and there are obligations that apply for that. I would observe that if ever there are any concerns about the conduct of retailers they can be directed to the Energy and Water Ombudsman.
Mr BERKMAN: Do you have any advice or recommendations for customers who might find themselves in that circumstance? Is there any particular way they should be approaching the retailer or any application process or the like?
Mr Martyn: At first instance, contact the retailer. If there is no satisfaction, often retailers have internal dispute resolution processes. If that is unsuccessful, the Energy and Water Ombudsman provides a very good service. I must say, looking at my department, we have not had significant concerns raised with us in the past, and I say that retailers have been of great assistance in providing support to Queenslanders and, after all, their customers.
Mr BERKMAN: One final question because it has just occurred to me: the fact that retailers will be holding payments made in advance before they go back to the customer actually represents quite a substantial windfall potentially for the retailers, by whatever means—they have the increase in their balance sheet or they are able to invest in certain ways to get further returns on the basis of what are quite substantial payments, I would imagine.
Mr Martyn: What I would say is the payments are scheduled to be made in the first quarter of this financial year. I am advised that 800,000 payments have been made to date. The retailers have applied these payments to people’s bills or are in the process of so doing. I think it is fair to say that there are administrative complexities associated with the rebate that have worked through and worked very successfully in recent years. We have no reason to suspect that the payments are being unnecessarily delayed. Certainly if there is evidence of that, we would very much appreciate hearing about it.