Electricity Industry (Ombudsman Scheme) Regulations 2005

EO (electricity ombudsman). The regulations adopt the definition in section 92(1) of the Electricity Industry Act 2004 - a person appointed under an approved scheme to investigate and deal with complaints against scheme members and electricity marketing agents. The EO has day-to-day operational control but is not a regulator; the EO cannot set prices or tariffs. The EO’s independence must be maintained by the governing body (reg 3(a)).

Approved scheme. An industry dispute resolution scheme approved by the Authority under sections 92 and 93 of the Act. The regulations do not prescribe a single scheme; any scheme can apply for approval so long as it meets the governance requirements. The regulations apply to whichever scheme is approved.

Governing body. Required by regulation 3. It must have equal numbers of member representatives and customer/public representatives, plus an independent chair. This is unusual: it forces power sharing between industry and consumers. The governing body controls policy, budget, EO appointment and review. It is the scheme’s board.

Complainant and complaint. Defined broadly in regulation 2: a complainant includes a person in dispute with a member of an approved scheme or an electricity marketing agent; a complaint includes such a dispute. This covers both customers and non-customers (e.g. land owners affected by statutory powers).

Direction. Under regulation 6, the EO may give directions to scheme members and electricity marketing agents. Directions are binding on marketing agents (reg 8) but the regulations do not explicitly say they are binding on members - that is presumably covered by the scheme’s own rules or the Act. The range of directions is wide: compensation, service provision, charges, records, corrective work, and general acts.

Statutory powers over land. Regulation 4(a) gives the EO jurisdiction over complaints about how a member exercised its statutory powers on a complainant’s land or neighbouring land. This likely covers powers like access for network maintenance, easement rights, or entry under licence conditions. It extends the ombudsman’s reach beyond pure electricity service disputes.

Director of Energy Safety. An official under the Energy Coordination Act 1994 (reg 6A(1)). The EO can request technical advice from the Director when a complaint involves alleged non-compliance with the Network Quality and Reliability of Supply Code. The Director must comply (reg 6A(4)). This creates a formal consultation mechanism between the ombudsman and the safety regulator.

Electricity marketing agent. Not defined in these regulations but used in regulation 8. The term has a meaning in the Act - essentially a person who sells electricity to customers but is not necessarily a licence holder. Marketing agents are directly subject to EO directions and fines for non-compliance, even if they are not members of the scheme.

Authority. Referred to in regulations 9 and 10 in connection with scheme review reports and revocation. The Authority is the Economic Regulation Authority under the Act, but the regulations do not re-define it. It oversees the scheme approval and can revoke it, but only after a mandatory consultation process.

Review and revocation. The governing body must review the scheme at least every five years, consulting interested parties and reporting to the Authority (reg 9). The Authority can revoke approval under section 94 of the Act, but regulation 10 imposes a detailed process: notification to two ministers and the public, 30+ day submission period, consideration, publication of submissions (unless confidential), and notification of the final decision. This gives procedural protection to the scheme.

The regulations directly affect four categories of entities.

Scheme members. These are licence holders (transmitters, distributors, retailers) that participate in the approved ombudsman scheme. They are subject to the EO’s investigatory and directional powers. They must also be represented on the governing body (reg 3(h)(i)) and share governance with customers. They fund the scheme (the governing body must ensure sufficient funding - reg 3(e)). If a member fails to comply with an EO direction, the practical enforcement mechanism is likely through the scheme’s rules or the Act, not the regulations (the fine in reg 8 only targets marketing agents). Members also bear the cost of implementing directions.

Electricity marketing agents. These are non-licensee sellers of electricity (e.g. independent aggregators or on-sellers). They are brought within the EO’s reach directly by the regulations. Regulation 8 imposes a statutory duty to comply with EO directions, backed by a fine of $2,000 (individual) or $8,000 (body corporate). This is a significant compliance risk for agents who may have less regulatory sophistication than licensed members. An agent can also have a complaint referred to the EO by a member or itself, with consent (reg 4(b)).

Complainants (customers and affected landowners). The regulations expand the pool of people who can bring a complaint. Beyond the Act’s standard complaints about electricity services, a complainant can be an owner or occupier of land affected by a member’s exercise of statutory powers (reg 4(a)). This could include neighbours of a substation or transmission line, or property owners facing access disputes. Complainants have a right to reasons for the EO’s decision (reg 7). However, the regulations do not give complainants a direct right to enforce an EO direction - that is left to the scheme or the Authority.

The Electricity Ombudsman and the governing body. The EO is a creature of the scheme, but the regulations set the constraints on the EO’s role: cannot set prices, must give reasons, must consult the Director of Energy Safety on Code complaints, and must be appointed and kept independent by the governing body. The governing body itself is bound by the structural requirements of equal representation and an independent chair. It also bears a regulatory compliance burden: it must review the scheme every five years and report to the Authority (reg 9).

The Director of Energy Safety. This official has a statutory duty under regulation 6A(4) to provide advice when the EO requests it. That imposes an unbudgeted, mandatory workload. It brings the safety regulator into the dispute resolution process.

The Authority and the Ministers. The Authority must carry out the revocation consultation process under regulation 10, which involves multiple notifications, publication, receipt and consideration of submissions, and decision notification. This is a compliance cost on the regulator. The Minister and the Fair Trading Minister are notified of any intended revocation and can presumably influence the process.

The public and interested bodies. Under regulation 10, the public must be notified of any proposed revocation and can make submissions. Their submissions are published (unless confidential). This gives public participation rights in the fate of the scheme. Similarly, the governing body must consult with interested persons when reviewing the scheme (reg 9(2)). The regulations thus affect anyone with an interest in electricity dispute resolution.

Duties of the governing body. Under regulation 3, the governing body must: maintain the EO’s independence; provide policy advice; appoint and terminate the EO; determine administrative policies; approve budgets and ensure sufficient funding; review the scheme every five years (reg 9) and provide advice on promotion and annual reports. The equal representation requirement (reg 3(h)) is not a duty on the governing body as such, but a condition for scheme approval - the scheme must provide for such representation. The duty to review the scheme (reg 9(1)) is a positive obligation, and the governing body must consult interested persons and give a report to the Authority (reg 9(2) and (3)). Failure to review within five years could expose the scheme to revocation.

Duties of the EO. The EO has day-to-day responsibility for the scheme’s operations (reg 5(1)(a)). The EO must investigate complaints that fall within the scheme’s jurisdiction and that relate to commercial activities within the scope of a member’s licence (reg 5(1)(b)). The EO must give reasons for decisions to the parties (reg 7). When dealing with a complaint about the Network Quality Code, the EO may request advice from the Director of Energy Safety (reg 6A(3)) - this is a power, not a duty, but if the EO chooses to request it, the Director must comply (reg 6A(4)). The EO must not set prices or tariffs (reg 5(2)) - this is a limitation on power, not a duty, but it creates a duty to refrain from certain actions.

Duties of electricity marketing agents. The only explicit duty is in regulation 8: an agent must comply with a direction given by the EO under the approved scheme. Non-compliance attracts a fine. The regulations do not impose any other duties on agents (e.g. to participate in the scheme, to respond to complaints, or to maintain records), but the EO direction could require those things case by case.

Duties of the Director of Energy Safety. Under regulation 6A(4), it is a function of the Director to do all things required to comply with a request from the EO under reg 6A(3). That is a mandatory duty, enforceable presumably through judicial review or through the Minister.

Duties of the Authority. Before revoking a scheme’s approval, the Authority must comply with regulation 10: notify the Minister, the Fair Trading Minister and the public; set out reasons; invite submissions (minimum 30 days); specify formats; take into account submissions; publish submissions (unless confidential); and notify the ministers and public of the final decision. This is a procedural duty.

Rights of complainants. A complainant has the right to have a complaint investigated and dealt with by the EO under the approved scheme, including complaints under the expanded jurisdiction in regulation 4. The complainant is entitled to reasons for the EO’s decision (reg 7). If the EO gives a direction in the complainant’s favour, the complainant has the right to have that direction enforced against a marketing agent (via the penalty in reg 8) but the regulations do not specify a private right of action.

Rights of members and marketing agents. A member or marketing agent can refer a complaint to the EO with the agreement of the EO and the complainant (reg 4(b)). That allows them to seek a binding dispute resolution rather than face court. Both members and agents have the right to appear before the EO and receive reasons for decisions. A member also has the right to be represented on the governing body equally with customers.

The regulations contain only one penalty provision: regulation 8. It provides that an electricity marketing agent must comply with an EO direction, and if it does not, the agent commits an offence. The penalty is a fine of $2,000 for an individual or $8,000 for a body corporate. This is relatively modest - $8,000 may be less than the cost of complying with a direction in some cases, which creates a potential underdeterrence problem. The fine is not indexed to time; it is a maximum per offence, likely per failure to comply.

Enforcement of this penalty would be through the ordinary criminal process - the Authority or perhaps the EO could refer the matter to the police or the Director of Public Prosecutions. The regulations do not create a private right of action for complainants to enforce directions against marketing agents. The fine is also only for marketing agents; scheme members (licensees) are not covered by regulation 8. The regulations do not specify enforcement against members who fail to comply with EO directions. That enforcement would likely occur through the scheme’s own rules (e.g. expulsion) or through the Act (e.g. licence conditions). This is a gap: compliance by scheme members is not backed by a direct statutory penalty in these regulations.

The regulations also provide for the ultimate enforcement tool: revocation of the scheme’s approval by the Authority under section 94 of the Act. Revocation is not a penalty on individual members or agents, but it would terminate the scheme entirely, leaving participants without an approved dispute resolution mechanism. The revocation process in regulation 10 is procedural, not penal - it ensures due process before the scheme is shut down.

There are no other penalties in the regulations. There is no penalty for the governing body failing to review the scheme, or for the EO failing to give reasons. Those obligations rely on the Authority’s oversight and revocation threat.

From an economic perspective, the penalty under regulation 8 may be insufficient to deter large corporate marketing agents. The fine of $8,000 for a body corporate is low relative to typical electricity contract values. The compliance burden of the direction may be higher, and the agent may rationally choose to ignore the direction and pay the fine if caught. However, the offence is likely a strict liability offence (no mental element specified), which eases proof. The regulator must still detect non-compliance.

Enforcement costs fall on the state or the scheme. There is no provision for the EO to impose a penalty directly (like a civil penalty) - only to give directions. The reliance on criminal prosecution for marketing agents and on scheme rules for members creates two different enforcement tracks, which may cause confusion.

The regulations sit under the Electricity Industry Act 2004 (the Act). They are made under sections 92, 93 and 94 of the Act, which deal with approval of ombudsman schemes. The regulations fill in the details the Act leaves to delegated legislation, including the specific governance requirements, expanded jurisdiction, functions, powers, review and revocation procedures.

The regulations explicitly reference the Electricity Industry (Network Quality and Reliability of Supply) Code 2005 in regulation 6A. That Code is a separate legislative instrument under the Act dealing with technical standards for network supply. The regulations create a cross-reference: when the EO handles a complaint about non-compliance with that Code, the EO may ask the Director of Energy Safety for advice, and the Director must give it. This links the ombudsman scheme to the technical safety regulator.

The Energy Coordination Act 1994 is referenced in regulation 6A(1) to define the Director of Energy Safety. That Act is the broader energy regulatory framework for Western Australia, covering energy safety and coordination. The regulations thus hook into that Act for the definition of an official, but do not invoke any other provisions.

The Fair Trading Act 2010 is referenced in regulation 10(2)(b) - the Authority must notify the Minister to whom the administration of the Fair Trading Act is committed before revoking a scheme. That Minister is presumably responsible for consumer protection. This connection ensures consumer affairs interests are considered in any scheme shutdown.

The regulations do not mention the Competition and Consumer Act 2010 (Cth), the Australian Consumer Law, or other federal laws. However, the scheme may need to comply with those laws separately (e.g. unfair contract terms, misleading conduct). The EO’s directions could intersect with consumer law remedies.

The regulations also do not interact directly with the Corporations Act 2001 (Cth) or energy market legislation like the National Electricity Law - but Western Australia is not part of the National Electricity Market, so that is consistent.

Regulation 7 requires the EO to give reasons for decisions “for the purposes of section 93 of the Act”. That section presumably sets a general obligation to give reasons. The regulations make clear that the scheme must provide for reasons to be given to both parties, not just the complainant.

The regulations lack any provision on confidentiality, privacy, or use of information. They do not state whether EO proceedings are subject to legal professional privilege, whether the EO can compel production of documents, or how the EO deals with commercial-in-confidence material. Those matters would be left to the scheme’s own rules, subject to the Act and common law.

Importantly, the regulations do not create an appeal mechanism from EO decisions. The scheme may provide for internal review or appeal to a court. The absence of a statutory appeal right means parties might seek judicial review under the Administrative Decisions (Judicial Review) Act 1977 (WA) or common law.

The regulations were originally made on 24 June 2005 and commenced that day. They have been amended three times.

2005 Amendment (Gazette 13 Dec 2005, commenced 1 Jan 2006). This inserted regulation 6A, dealing with complaints about the Network Quality and Reliability of Supply Code. It also added the definition of “Director of Energy Safety” and the reference to the Code. The amendment broadened the EO’s ability to get technical advice from the safety regulator. No other changes appear from the compilation table.

2011 Amendment (Gazette 8 Feb 2011, commenced 9 Feb 2011). This amended regulation 9. The original regulation 9 presumably did not have a review date. The amendment added the “before 30 September 2013” deadline and the requirement to review at least once every five years thereafter. It also may have added the requirement to consult interested persons - the current regulation 9(2) was likely inserted or modified. The amendment brought the review requirements into line with modern administrative practice.

2011 Amendment No.2 (Gazette 29 Jul 2011, commenced 30 Jul 2011). This amended regulation 10. The main change was updating references from the Fair Trading Act 1987 to the Fair Trading Act 2010. It also expanded the notification requirements: the current regulation 10 requires publication in the Gazette, a newspaper, on an internet website, and by email to persons on the Authority’s mailing list. It also added the requirement to publish submissions (unless confidential) and to notify the public of the final decision. The pre-2011 regulation likely had a simpler process.

There have been no amendments since 2011. The scheme has not been revoked, so the regulation 10 process has not been tested. The five-yearly reviews under regulation 9 should have occurred in 2013, 2018, 2023, etc. Whether they have is a matter of practice outside the regulations.

The compilation table shows no amendments after 2011. The regulations remain in force as at the date of this compilation (which appears to be after 2011). The defined terms list is provided for convenience but is not part of the law.

The source regulations contain no references to any litigation. No cases are cited in the text. In preparing this deep dive, no assumption of litigation should be made. However, it is noteworthy that the regulations have been in force for nearly two decades without reported challenges to their validity or to decisions of the EO under the scheme. That may indicate that the scheme operates without provoking litigation, or that disputes are resolved internally and without judicial review.

The only potential litigation avenue would be judicial review of an EO decision or of the Authority’s decision to revoke or not revoke a scheme. There is no express ouster of court jurisdiction in the regulations. The regulations do not create a statutory appeal right, so any review would be under the general law. The requirement to give reasons (reg 7) facilitates judicial review.

The Authority’s decision on revocation under regulation 10 is a statutory decision subject to procedural fairness and judicial review. The mandatory consultation requirements provide strong procedural protection, reducing the risk of successful challenge, but also increasing the compliance cost on the Authority.

The penalty in regulation 8 could be prosecuted in the Magistrates Court. No cases are reported in the regulations, but prosecutions may have occurred under the scheme and gone unreported in this compilation.

The absence of litigation history in the source should not be taken as absence of litigation entirely - it simply means the text of the regulations does not record any. Practitioners should search WA court databases for decisions referring to these regulations or to EO directions.

No direct enforcement against scheme members. Regulation 8 only applies to electricity marketing agents. If a licensed member of the scheme (e.g. a retailer or distributor) ignores an EO direction, the regulations do not impose a fine. The enforcement must come through the scheme’s own rules or through the Act. A complainant cannot rely on a statutory penalty against a member. This creates an asymmetry: marketing agents face a fine, but members do not. This may be deliberate because members already face licence conditions, but it leaves individual consumers with less leverage against large licensees.

The EO cannot set prices, but can direct not to impose a charge. Regulation 5(2) says the EO cannot set prices or tariffs or determine price structures. Yet regulation 6(c) allows the EO to direct a member to “amend, or not to impose, a charge in relation to a service”. The line between setting a price and amending an individual charge may be blurry. A direction not to impose a charge is not a price-setting decision for the whole market, but it effectively determines the price for that complainant. The EO must be careful not to stray into tariff-setting. This could be a source of jurisdictional challenge.

The governing body’s requirement for equal representation can cause deadlock. An equal number of member representatives and customer/public representatives (reg 3(h)) combined with an independent chairperson may lead to parity and no casting vote for the chair unless the scheme provides otherwise. This can paralyse decision making, especially on budget or policy disputes. The regulations do not specify how ties are broken. The scheme itself must address this. Failure to do so could threaten the scheme’s independence.

The five-year review is a fixed obligation. Governing bodies must review the scheme before 30 September 2013 and at least once every five years thereafter. The first review deadline has passed. If a governing body fails to conduct a review, it is not directly penalised, but the Authority could treat that as grounds for revocation. The review must also involve consultation with all interested persons “as many as practicable” (reg 9(2)), which is a broad and potentially burdensome requirement. The governing body must then report to the Authority. Non-compliance exposes the scheme to revocation.

Revocation process is heavy on the Authority. Before revoking a scheme, the Authority must notify the Minister, the Fair Trading Minister and the public in four different formats, wait at least 30 days, consider all submissions, publish submissions, and notify decision. That is a costly process. It may deter the Authority from revoking even a poorly performing scheme because the administrative burden exceeds the benefit of revocation. This creates a risk that an ineffective scheme remains approved.

Marketing agents are caught even if they are not members. The regulations define “complainant” as including a person in dispute with “a member of an approved scheme or an electricity marketing agent”. So an agent can be a respondent even if it chose not to join the scheme. That is unusual - non-members generally have no obligation to participate in an industry Ombudsman scheme. Yet regulation 8 makes them subject to directions, and the EO’s jurisdiction includes complaints referred by the agent or member (reg 4(b)). If an agent is not a member, it may have no representation on the governing body and no input into scheme policies, but still faces enforceable directions. That could be challenged as an invalid extension of the scheme beyond its membership.

No statutory appeal rights. Complainants and respondents have no statutory right to appeal an EO decision. They are limited to judicial review or possibly a right under the scheme itself. This may create uncertainty and may prevent the development of a consistent body of decisions.

The Director of Energy Safety’s duty to give advice is mandatory but unfunded. Regulation 6A(4) says it is a function of the Director to comply with an EO request. No fee or cost recovery mechanism is provided. This imposes an unbudgeted workload on the safety regulator, which may lead to delays or resentment.

Compliance depends on which party’s perspective is taken.

For an approved scheme’s governing body. Ensure the scheme’s constitution or rules comply with regulation 3: equal representation of members and customers, independent chair. Maintain the EO’s independence - do not interfere in individual investigations. Appoint and terminate the EO according to the scheme rules. Approve budgets and ensure sufficient funding - that may require levying members. Review the scheme before 30 September 2013 and at least every five years thereafter. The review must consult interested persons (customers, industry, regulators, etc.) and produce a report for the Authority. The governing body should keep records of these reviews and the consultation process. It must also provide advice on promotion and annual reports. Any change to the scheme that might affect compliance with these regulations should be done with legal advice.

For a scheme member (licensed entity). Participate in the governing body representation. Comply with all EO directions given to you. Even though regulation 8 does not penalise members for non-compliance, the scheme’s rules and the Act likely require compliance, and failure could lead to expulsion or licence breach. Cooperate with EO investigations. Hold appropriate insurance or funds to cover potential compensation directions. Ensure your internal dispute resolution processes align with the scheme’s requirements. When the EO requests information, provide it promptly. If a marketing agent is involved in a complaint involving you, be aware of the referral pathway under reg 4(b).

For an electricity marketing agent. The primary obligation is in regulation 8: if the EO gives you a direction, you must comply. If you do not, you risk a fine of $2,000 (if an individual) or $8,000 (body corporate). This is a strict liability offence likely, so ignorance is no defence. The direction could require you to provide an electricity service (reg 6(g)), pay compensation, or do other things. You should have a process for receiving and reviewing EO directions. If you disagree, you must still comply unless you obtain a stay or judicial review - there is no internal appeal in the regulations. You may also be subject to complaint investigations even if you are not a scheme member. Marketing agents should consider joining the scheme voluntarily to have representation on the governing body and input into policies.

For the Economic Regulation Authority (the Authority). When deciding to revoke a scheme, follow regulation 10 strictly. Notify the Minister, the Fair Trading Minister and the public. Publish the notice in the Gazette, a WA newspaper, on your website, and by email to mailing list recipients. Give at least 30 days for submissions. Consider all submissions received on time. Publish non-confidential submissions on your website and make them available on request. Then notify the same parties of the decision, in the same manner. Keep records of all steps. If you are not revoking, ensure you monitor scheme reviews and reports.

For the Director of Energy Safety. If the EO requests advice under reg 6A(3), provide it without delay. The request will relate to a complaint about the Network Quality Code. You should have internal procedures to handle such requests and to document the advice given. Failure to provide advice could lead to the EO seeking a court order or reporting to the Minister.

For an individual or entity receiving a complaint or being the subject of an EO investigation. Respond promptly. Provide all relevant information. If you are a marketing agent, be aware of the fine risk. If you are a member, you may rely on scheme rules. Seek legal advice before refusing a direction. If you are a complainant, you have no compliance obligations but you can ask for reasons and, if dissatisfied, explore judicial review.