Overview: A Major Wake-Up Call for WA Energy Retailers
The Economic Regulation Authority of Western Australia (ERAWA) has revealed a serious governance lapse within Synergy, the state’s largest energy retailer, following a $40 million overcharging incident. The watchdog warns this may not be an isolated case and that other energy retailers could have charged customers in error as well. The situation is prompting renewed scrutiny of billing practices, customer protections, and governance standards across the sector.
The Core Issue: Overcharging Through Non-Existent Bills
From 2009 onward, Synergy reportedly billed and collected payments for non-existent charges. CEO Kurt Baker acknowledged that in several instances, customers continued to pay on closed accounts even in the absence of a bill. In total, around 175,000 customers were affected, with the overcharges ranging from fractions of a dollar to tens of thousands of dollars on individual accounts.
ERAWA’s inquiry has highlighted that some of these payments were automatically deducted from Centrelink payments, particularly among disadvantaged customers enrolled in Centrepay. The revelation has intensified calls for transparent governance and robust checks to prevent recurrence.
ERAWA’s Findings and Statements
ERAWA chair Steve Edwell described the $40 million overcharging as the worst case of its kind he had seen. He pointed out that more than 13,000 accounts carried charges exceeding $500, and 467 accounts held a credit balance over $5,000. He argued that warning signs were evident—such as customers reporting automatic payments to closed accounts—yet governance gaps allowed the issue to persist.
Governance and Remediation:
Company leadership has acknowledged the problem, with Mr. Baker apologizing on behalf of Synergy and committing to refunds or credits for affected customers. The refunds, whether issued as cash or future bill credits, are expected to take several months to complete as the company works through its customer base.
ERAWA emphasised that penalties could be imposed if the issues are not resolved. While fines can exceed $100,000 for noncompliance, Edwell argued that such penalties may still fall short of the damage done to customers’ trust and household finances.
Potential Implications for Other Retailers
Although Edwell cautioned that the issue does not appear to be endemic across the sector, he confirmed that he expects other retailers could be impacted. He noted that the regulator is pursuing a broader review to determine the full extent of improper charges and to decide on enforcement actions where appropriate. Details about other businesses will be disclosed only after the review’s completion.
What Consumers Should Know
Customers who suspect they were affected by Synergy’s overcharging should monitor communications from the company and the ERA for refund timelines. If you were billed after your account was closed or noticed unexplained payments from Centrepay, you should contact Synergy’s customer service and request a reconciliation of charges. Keeping a personal record of bills and payment receipts will help speed up verification during refunds.
Broader Context and Next Steps
The Synergy case fits within a wider regulatory push to ensure energy retailers maintain robust governance, accurate billing, and transparent customer protections. ERAWA’s ongoing review will consider systemic fixes—potentially including strengthened oversight, improved audit trails, and clearer guidelines for handling Centrepay deductions. The regulator has signaled readiness to impose enforcement actions where necessary to restore confidence and protect consumers’ financial wellbeing.
As the sector awaits further findings, affected customers, advocates, and watchdog groups will be watching closely to see whether other retailers emerge as having similar issues and how regulators gridlock those problems to prevent future harm.
