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  • #10833

    Hi, I own a lot within a community title which is approved for commercial use where we run a restaurant. All other lots in the scheme are residential, mostly managed as holiday lets.  Below is a bit of the background of our issue explained with two questions at the bottom:

    There is a reticulated LPG gas network (also known as an embedded network) installed in the community where gas is piped and metered to all lots.  The property managers are responsible for buying the LPG in bulk and then bill each lot for the usage.

    As we run a commercial business, we’ve done a bit of research into the costs we are being charged and there is a significant difference between the costs we’re charged and the rates available on the open market if we were to have our own LPG tanks.  This would reduce our costs by some 25%.  We have approached the property managers and asked if they would be willing to negotiate pricing with us but they declined and have shown no preparedness to even have a conversation about it.

    We have approached the Executive Committee about the subject, they have not made any help in negotiating this, merely defending their right to make a profit margin on this as they would be investing large sums of capital to buying the gas in bulk and then on-selling.

    Having done some research into this we’ve come across some potential beaches of Australian Retail Law, and little compliance with the regulations set by the Australian Energy Regulator.  Bringing these to the attention of the EC and the Property managers has only resulted in arrogant defense of their positions. ‘

    We have put a request to have our own LPG tanks installed – as it is a change on the outside of the building, By-Laws state that approval from the EC must be sought.  The EC has voted yes we can do this but that we must have a new By-Law drafted at out own expense.  Little detail has been given to us about what they would like this By-Law to entail and they have refused us commissioning our own solicitor to make a draft due to conflict of interest.  We are deeply concerned about the potential costs we may be up for to simply get a utility supplied at the correct market price.

    Question 1:  Do the EC have a right to enforce this and make us pay for the ByLaw where that itself could be in breach of Aust. Retail Law ?

     “Retail Law states that ‘exempt customers should, as far as practicable, be afforded the right to a choice of retailer in the same way as comparable retail customers in the same jurisdiction have that right’. In principle, all customers should be able to choose their energy retailer. We therefore do not support the creation of infrastructure that deliberately reduces a customer’s ability to exercise choice.” – This is an exert from the AER guidelines.

    Question 2:

    Is there a way to enforce that the property managers charge us the correct rates anyway to save the costs of us separating onto our own supply?  I have had no assistance from the Ombudsman or the AER themselves as they claim to not deal with LPG – only Natural Gas or Electricity. 

    “Exempt sellers who are selling to small, commercial or retail customers in embedded networks who do not have cost-effective access to choice of retailer are also not permitted to charge those customers more than the local area retailer’s standing offer.” 

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