Residential Community Electricity FAQs

These FAQs apply only to residents who live in a residential community and are supplied electricity directly by the operator through an embedded network.

1. How do home owners know if their residential community has an embedded electricity network?

In an embedded electricity network, the wires from the electricity retailer run to the boundary of the residential community. The home owner’s residential site is then supplied with electricity by the operator’s network of wires. The electricity retailer has an account with the operator, not the individual home owners.

In an embedded network, the home owner receives their electricity bill from the operator who works out electricity charges for each home owner as a share of the bill received from the electricity retailer for the whole residential community.

If a residential community, does not have an embedded network, the home owner is connected directly to the electricity retailer. They receive their electricity bill from the electricity retailer.

2. How much can an operator charge home owners for electricity? 

Operators of residential communities must not charge a home owner more for electricity than the operator has been charged by the electricity retailer for the supply or use of the electricity consumed by the home owner.

3. Why does an operator’s bill look different from a standard household electricity bill? 

The electricity bill that an operator receives usually looks very different from a standard residential bill that a home owner receives when they are directly connected to an electricity retailer.

There are usually a range of charges that are separately listed in an operator’s bill. In a home owner’s bill these charges are usually rolled into a single usage charge and a single service availability charge. Home owners are still charged for most of these items, but they are not separately set out in the bill.

The links below provide sample commercial and residential electricity bills.

4. How can an operator and home owner calculate how much a home owner can be charged for electricity?

Operators can choose how to calculate their electricity charges as long as the outcome is that a home owner is not charged more than the operator has been charged for the   electricity they use.

The Associated Residential Park Residents’ Association (ARPRA), Land Lease Living Industry Association of NSW (LLLIA), the Energy & Water Ombudsman NSW (EWON) and the Tenants’ Union of NSW (TU) support a calculation method that was used by the  NSW Civil and Administrative Tribunal (the Tribunal) in the case: Reckless v Silva Portfolios Pty Ltd t/as Ballina Waterfront Village and Tourist Park (No. 2) [2018] NSWCATCD 59 (“Reckless method”).

To apply this method (referred to as the Reckless method), all charges in an operator’s bill are combined, and then divided by the total number of kilowatt hours the operator has been charged for the whole community. This results in a single per kilowatt hour (kWh) rate. To calculate the correct charge for the home owner, the rate per kilowatt hour is multiplied by the total kilowatt hours used by the home owner.

If you would like to replicate this method for your bills, the steps would be:

Step 1:

Cost per Kilowatt Hour ($kWh) = Total operator electricity cost for billing period ÷ total operator kilowatts hours used in billing period

Step 2:

$kWh × Total kWh used by resident = Charge to resident

A simple example of how this would work in practice is: if the total bill for the operator is $1,000.00 and the residential community has used a total of 1,000 kWh for that billing period. This would mean a per kWh charge of $1.00 ($1000/1000 kWh = $1 per kWh). So, if a home owner consumed 100 kilowatt hours of electricity in a billing period, they would be charged $100.00 ($1 per kWh x 100 hours = $100).

The Reckless method leaves the operator to pay for the electricity consumed in the common areas, as these will not be included in the kilowatt hours consumed by a home owner at their residential site.

For example, if there are 8 home owners in a community and each uses 100 kilowatt hours, the operator will collect a total of $800.00. If the operator’s bill is $1000, there will be a difference of $200.00, for electricity used in the common areas of the community, that is paid for by the operator.

5. How does the Reckless method impact on service availability charges?

The Reckless method of calculating how much a home owner is charged for electricity includes a number of fixed charges (which are not based on usage) in the overall amount. These fixed charges are equivalent to the service availability charge on a residential bill. This means that, if an operator uses the Reckless method, they cannot also charge home owners a separate service availability charge.

Where a community has residential sites that are supplied with electricity that is less than 60amps, operators or home owners may want to seek advice from NSW Fair Trading or EWON about how to take account of the low amperage provisions in clause 13 of the Residential (Land Lease) Communities Regulation 2015.

6. How do other electricity charging methods impact on service availability charges?

There are a number of methods, besides the Reckless method, that an operator can use to work out how much a home owner should be charged for electricity.

If an operator uses an alternative method to the Reckless method, then a separate service availability charge may apply. If the operator charges a service availability charge, it would need to comply with existing requirements in the Residential (Land Lease) Communities Regulation 2015.

Operators may wish to consult with home owners to agree on the method used to calculate electricity charges, in the residential community.

Operators should make clear to home owners, the method they have used to calculate electricity charges.

7. Can home owners access an operator’s electricity bills and other information about how they are being charged for electricity?

Under section 83 of the Residential (Land Lease) Communities Act 2013, home owners have the right to see an operator’s electricity bill or other documents that relate to how much they are charged for utilities like electricity.

Operators can provide access to their electricity bill in a number of ways. For example, a copy of their bill could be provided on request (with reasonable notice) or put on display in the office at the residential community, or the operator could email a copy to home owners.

If home owners are having problems in getting access to bills or other documents about utility charges, they should attempt to discuss this with the operator first. If this is not successful, they can contact Fair Trading or Energy & Water Ombudsman NSW (EWON) for help.

8. What if a home owner believes they have been overcharged for electricity? 

If home owners have concerns about how their bill was calculated, they should speak to the operator first. If they still have concerns after that, they can contact NSW Fair Trading or the Energy and Water Ombudsman NSW (EWON).

If a home owner has a right to a repayment for overpaid electricity charges, it may be possible for the home owner, or the residential community’s residents committee, to negotiate with the operator to come up with an amount that everyone agrees on. Both home owners and operators may find that collective negotiations provide a quicker and more effective way to settle repayments than home owners talking to the operator one-by-one.

Home owners and residential community operators can use Fair Trading’s existing mediation service to help with these negotiations. For further information about applying for this service contact Fair Trading on 13 32 20 or visit www.fairtrading.nsw.gov.au

Home owners can also still apply individually to the Tribunal for a decision on how much money the operator must repay for overcharging for electricity. However, there are costs as well as potential time delays involved in the Tribunal process.

Home owners may wish to contact LawAccess NSW on 1300 888 529 for free legal advice about  time limits that may apply, before lodging any Tribunal application. The Tribunal may also be contacted at www.ncat.nsw.gov.au or by calling 1300 006 228 (select option 1 for all Consumer and Commercial Division enquiries).

9. If I have been overcharged, how far back will I be able to claim a repayment? 

If negotiating a repayment, how far back the repayment can go is something that home owners and operators could agree on, depending on the circumstances at their residential community.

The earliest time a claim could start from is 1 November 2015, which is the date the Residential (Land Lease) Communities Act 2013 started.

If home owners choose to apply to the Tribunal for a repayment order, the extent of repayment may depend on the specific circumstances of the case.

10. If the operator wants to give home owners a credit on their future electricity bills instead of a repayment, can they do this?

Yes. The home owners could agree to this arrangement as part of any collectively negotiated outcome, or as part of any repayment ordered by the Tribunal.

Home owners and operators could also agree to another solution, such as home owners getting a credit on future bills or site fees they would have to pay.

It would be best for both home owners and operators to make sure that any arrangements like this are put into writing, to avoid any confusion or uncertainty later on.

Home owners may also want to ask their operator to give them an account showing how much they are going to be credited and a running balance as credits are used up.

11. When should home owners expect to get any repayments?

When home owners and residential community operators work together to agree on repayments, they could agree on the timing of these payments and put this in writing.

When the Tribunal orders that a repayment must be made, the Tribunal may tell operators and home owners when those payments must be made.

If home owners are concerned their operator is delaying a repayment, they can contact Fair Trading on 13 32 20 or Energy & Water Ombudsman NSW (EWON) on 1800 246 545.

12. Do former home owners have the right to a repayment?

Former home owners who lived in a residential community after 1 November 2015 and paid electricity bills during that time may have the right to a repayment, if they were overcharged.

Any repayment to former home owners could be part of a collectively negotiated outcome. This would be something for current and former home owners and operators to discuss and decide together.

Former home owners could also apply to the Tribunal for a repayment. Time limits may apply.

13. Do home owners have to pay their next electricity bill if they haven’t received any repayment yet?

Yes. Home owners still need to meet the terms of their site agreement and pay their electricity bills. Homeowners should only stop paying bills if this is something the operator has agreed to.

14. What can home owners or operators do if they need help to understand anything to do with electricity charges or repayments?

For help, home owners and operators may contact:

  • Affiliated Residential Park Residents Association (ARPRA)
    1300 798 399
    www.arpra.org.au

16. What help is available for residents in low income households to help pay for electricity and gas charges?

The NSW Government has rebates and appliance replacement offers that may help people on low incomes living in residential communities to pay their electricity and gas charges.

More information about these rebates, who can claim them and how to apply for them is available from Service NSW. Call 137 788 or go to www.energy.nsw.gov.au/energy-consumers/financial-assistance/rebates

Background about electricity charges in residential land lease communities

Residential communities (formerly known as residential parks) include caravan parks or manufactured home estates with permanent residents (home owners). It has been legal for people to live permanently in these types of communities since 1986.

Many residential communities have always had an embedded electricity network, and therefore home owners in these residential communities have never been directly billed by electricity retailers.

The current Residential (Land Lease) Communities Act2013 (the Act) was passed by the NSW Parliament on 14 November 2013 and started on 1 November 2015.

Section 77(3) of the Act says that an operator must not “charge a home owner an amount for use of a utility that is more than the amount charged by the utility service provider or regulated offer retailer who is providing the service for the quantity of the service supplied to, or used at, the residential site”.

When the NSW electricity market was deregulated in 2014, there was no longer a “regulated offer retailer” offering a regulated price for electricity. However, as s. 77(3) retains reference to “regulated offer retailer” there were differing views about how the provision should be interpreted. A common interpretation was that the maximum electricity charges that could be imposed by electricity retailers could be passed on to home owners.

This issue was highlighted when several home owners applied to the NSW Civil and Administrative Tribunal (the Tribunal) for refunds of the electricity charges they had paid.

One of these applications resulted in an appeal to the NSW Supreme Court on the issue of how much a home owner can be charged for electricity (Silva Portfolios Pty Ltd trading as Ballina Waterfront Village & Tourist Park v Reckless [2018] NSWSC 1343).

In summary, the Supreme Court found that an operator does not have the right to charge a home owner more than the operator has been charged for electricity consumed by the home owner. This made it clear how the electricity usage charging requirements in the Act should be interpreted.