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Friday, May 19, 2000
Energy company admits bills fiasco By DAVID HUMPHRIES State Political Editor
One of the State's largest electricity companies, Integral Energy, has admitted that more than 70,000 customers were caught up in an accounts debacle that will cost millions of dollars to fix.
A review of the company's billing system, prepared in March and obtained by the Herald, reveals a raft of failures by the State-owned Integral in how it tries to get paid for the electricity it sells its customers.
It found 70,000 of Integral's 750,000 customers in western Sydney and the Illawarra were overdue five months, 120,000 reminder notices had not been issued, while 8,000 customers had been double billed and required refunds.
Integral, the State's worst performing electricity distribution company, has admitted that nearly a tenth of its customers were not billed at the peak of the debacle.
Installation of the new billing system, and repairs to it, will cost Integral more than $40 million.
Fifty major customers could not be re-billed because of invalid service history, 100 customers' accounts had been directly debited incorrect amounts and 150 customers had services "mysteriously" disconnected.
Data entry was backlogged and data was of poor integrity and quality, with wrong amounts appearing on bills.
The review also found GST compliance by July 1 was at high risk and the foul-ups might encourage Integral customers to look elsewhere when households and small business are allowed to shop around for power from January 2002.
The review appears to have been prepared for Mr Jeff McCarthy, general manager customer operations group, who told ABC Radio this week: "I think it would be in the low numbers [of customers] that aren't receiving their bill."
But Integral's new chief executive, Mr Richard Powis, told the Herald yesterday that customers without bills numbered about 70,000 when he took over the troubled company's reins in January and that this was now down to about 10,000 to 20,000.
Mr Powis said he had put the billing system, with its ongoing flaws, "on holding pattern" while Integral tried to get its accounts process ready for the GST.
Emphasising the priority he was giving the difficulties, Mr Powis said: "I now have a weekly billing meeting."
The Carr Government had a sale value of several billion dollars in mind for Integral when it proposed privatisation of the electricity system three years ago (before backing down to ALP pressure).
But the company has been a headache since. Its former chairman, Mr Bill Hilzinger, blamed "fierce competition and slim margins" for a 61 per cent drop in profits to $74 million in 1998-99, when the Government had to cop a halving of its forecast shareholder dividend.
Integral, formed in 1996 by the merger of Prospect and Illawarra, had two CEOs before Mr Powis, who said the new billing system was "rushed in for Y2K and not tested as fully as it should have been". He denied income would be lost. "We'll eventually get to them [customers who had not been billed for six months]," Mr Powis said.
Delayed bills, however, were only part of the embarrassing picture. Several customers - householders - complained to ABC Radio this week that they had received bills for up to $26,000.
Mr McCarthy said: "We are not asking people to pay those bills which are obviously in error. We would only ask that people pay the amount which is for the energy they have actually consumed."
How should customers work that out? Telephone Integral's help line, Mr McCarthy said.
That was not always simple, however. Another Integral document obtained by the Herald showed help line calls averaging 9,000 a day with an average waiting time of 29 minutes in January. On January 31, 5,000 calls were unanswered. Powis said yesterday that help line calls now averaged 6,000 a day.
-- Martin Thompson (email@example.com), May 18, 2000