Introduction: A $40 Million Toll from a Governance Gap
A sweeping probe into Western Australia’s energy sector has spotlighted a serious governance lapse at the state’s biggest retailer, Synergy. The Economic Regulation Authority of WA (ERAWA) confirmed that customers were overcharged by about $40 million since 2009 due to a chain of administrative and governance failures. While the overcharging affected almost 175,000 customers in varying degrees, the episode has broader implications for how utilities are supervised and how retailers manage customer accounts, including those tied to welfare programs.
The Core of the Problem: Non-Existent Bills and Closed Accounts
According to Synergy’s CEO Kurt Baker, the overcharging happened when customers continued to pay for accounts that were effectively closed, and in some cases, even in the absence of an active bill. The practice culminated in automatic deductions from customers’ payments, including those linked to Centrepay—part of the welfare system used by Centrelink recipients. ERASA officials described this as among the most serious instances they have encountered, with roughly 13,000 accounts showing charges above $500 and 467 accounts carrying credits exceeding $5,000.
The problem, according to ERASA chair Steve Edwell, appears not to be isolated to Synergy. He noted that the larger pattern of overcharging—especially for disadvantaged customers—revealed gaps in governance and controls that should have flagged abnormal payments long before they escalated into a $40 million issue.
Government and Regulatory Reactions
ERAWA is treating the Synergy episode as part of a broader audit across the energy sector. While the regulator has not released comprehensive findings about other retailers, Mr. Edwell indicated that there could be similar issues elsewhere. He stressed that at this stage there is no evidence of a sector-wide endemic problem, but warned that “we won’t hesitate to take action against other retailers” if the review uncovers weaknesses or mispractice.
Synergy has acknowledged the breach and pledged to contact all affected customers, offering refunds in cash or credits for future bills. Baker apologized on behalf of the company and expressed confidence that such errors would not recur. The refunds may take months to process as the business coordinates with customers who have had erroneous charges on their accounts for years.
How the Overcharge Unfolded
The mechanism, as described by the regulator and company insiders, involved automatic withdrawals from closed accounts and the application of charges without an active, verifiable bill. In some cases, customers continued to be charged for services they were no longer receiving, while others saw funds credited back after inquiries were raised. The complexity of billing systems in energy retail—paired with a lack of robust governance—appeared to have allowed these errors to persist over a long period.
ERAWA’s role has emphasized accountability: if a utility fails to fix these issues, the regulator can impose penalties exceeding $100,000, underscoring the seriousness with which the watchdog treats customer harm and financial mismanagement in essential services.
What This Means for Customers and the Market
For customers, the immediate consequence is financial pain and a prolonged process to secure refunds or credits. The broader question is about public trust: when a state-owned retailer demonstrates governance failures, how do consumers distinguish between mismanagement and malfeasance? The ERAWA review is a test of transparency and accountability in how the sector is overseen, with potential enforcement actions on the horizon for the company and, if applicable, for other retailers found to be non-compliant.
Industry observers say the incident highlights the need for stronger controls around billing platforms, especially for customers in welfare programs who may be more vulnerable to erroneous charges. Regulators are signaling that governance reforms, clearer internal audits, and proactive customer protections will be central to restoring confidence in the sector.
Next Steps
ERAWA’s review is ongoing. Until it concludes, Synergy will continue to process refunds and implement interim measures designed to prevent recurrence. The regulator will decide whether further enforcement action is warranted and will determine what messaging and policy adjustments are necessary to protect customers and ensure fair billing practices across the WA energy market.
