Overview: A $40 Million Overcharging Bungle
The Economic Regulation Authority of Western Australia (ERAWA) has revealed a significant governance lapse at WA’s largest energy retailer, Synergy, that led to about $40 million being charged to customers for non-existent bills since 2009. The episode is described by the watchdog as a serious governance failure with potential implications for other retailers in the sector.
What Happened
Synergy’s chief executive, Kurt Baker, confirmed that in many cases customers continued to pay toward accounts that had already been closed, even without an active bill. The upshot: around 175,000 customers were affected, with overcharging ranging from small amounts to tens of thousands of dollars per account. The issue surfaced as part of a broader ERARA (Economic Regulation Authority) review into whether disadvantaged customers, including those on Centrelink, were disproportionately affected.
Unintended Consequences for Centrelink Payments
ERAWA chair Steve Edwell noted that automatic deductions from Centrepay were among the most concerning findings. Payments were being debited from customers whose Synergy accounts were closed, which underscored the broader vulnerability of financially stressed households. The regulator highlighted the Centrepay cohort to illustrate a wider pattern rather than an isolated incident.
The Scale and Severity
Edwell described the $40 million overcharging as the worst case of its kind he was aware of, with roughly 13,000 accounts carrying more than $500 in excess charges and 467 accounts showing a credit balance exceeding $5,000. The spread illustrates not only a systemic failure but also potential harm to vulnerable customers who rely on accurate and timely billing.
Governance and Oversight
Synergy’s leadership faces renewed scrutiny as ERAWA emphasizes governance failures as a root cause. The watchdog argues that red flags—such as customers reporting automatic payments to closed accounts—should have triggered internal reviews much sooner. The regulator’s assessment implies that stronger internal controls and governance frameworks are essential to prevent similar issues in the future.
What’s Next for Synergy and the Sector
Synergy has pledged to contact all affected customers and provide refunds or bill credits. The process is expected to take months. ERAWA has the authority to impose fines, with penalties potentially exceeding $100,000 for non-compliance or failure to fix issues. Edwell indicated that the regulator would consider a range of enforcement actions for Synergy and would not hesitate to act against other retailers if their conduct warranted it.
Industry Implications
While Edwell stressed that the issue may not be endemic across the entire sector, he cautioned that similar overcharging could exist at other retailers. The ongoing review seeks to map the full extent of the problem and determine appropriate regulatory responses. The outcome could shape future governance standards, consumer protection measures, and enforcement strategies for energy providers in Western Australia and beyond.
What Consumers Should Do
Customers who suspect errors on their bills or automatic payments should contact their energy retailer promptly. Keeping track of account statuses, reviewing recent billing statements, and reporting discrepancies to the regulator can help mitigate harm. While refunds are being arranged, affected customers should stay informed about the progress of the recovery program and any updates from ERAWA.
