Consumers have a right not to be overcharged, too...

It is worrying to note that – despite all the recent progress achieved on institutional reform – there are still instances where both the government, and the relevant regulatory authorities, seem to be burying their heads in the sand.

A case in point is the ongoing controversy surrounding ARMS Ltd’s billing system. A draft report by the National Audit Office (NAO) has found that consumers could have paid “extra charges”, totalling €6.5 million, on their electricity and water bills.

This suggests that people are still paying more than what is due from them: despite the fact that this anomaly was originally flagged in 2018.

While the Opposition may have jumped the gun by immediately announcing a EUR 50 million refund scheme if elected to power – and even more so, by inviting people to register an “interest” in the scheme, by handing their personal details to the party – the government has been more conspicuous by its silence.

All the energy ministry would say is that it is “premature to comment on any potential draft reports that may result from an on-going audit process between the NAO and the concerned entities”.

But the government has had plenty of time to analyse the situation, and come up with a solution to a problem it was well aware of.  Former prime minister Joseph Muscat had acknowledged in 2018 that “anomalies” existed in the ways ARMS was calculating bills; and had promised to redress those anomalies in 2019.

Former energy Minister Joe Mizzi had also declared in parliament that he had gathered all complaints received regarding overcharging for electrical consumption due to bills being issued on a two-monthly basis, and forwarded them to the relevant entities in order to obtain more information, after which he was to evaluate the situation and decide what to do.

But the issue itself was originally flagged by economist Marie Briguglio on her Facebook page, where she gave a detailed explanation of how the two-monthly billing system being used by ARMS could lead to consumers paying more than necessary if their consumption fluctuates significantly between billing periods.

For normal consumers the anomaly stems from the fact that ARMS splits the allocation for the different tariff bands across the bills that the consumer receives during this period. But since consumption tends to peak during the summer months, when air-conditioners are used, and around the Christmas period, consumers may end up being charged at higher rates simply because ‘cheap’ unused units would have been lost during periods of lower consumption.

While having different bands based on levels of energy use is a good and socially fair way of calculating bills, it also makes sense to ensure that bills also take seasonal variations into account.

But two years down the line, the billing method has remained unchanged.

This is therefore one clear case where the government has not been proactive, and where the opposition is justified in holding it to account.

The government is duty bound to honour its own pledge to redress this anomaly, and change the billing system to ensure that bills reflect actual energy consumed over a period of time.  It should also consider offering some form of redress, particularly to low-income consumers.

Moreover, consumers are entitled to a breakdown of how their bills are calculated.  This highlights the importance of invigorating the consumer authority which should have been at the forefront in defending citizens.

Unfortunately, however, in this case the Malta Competition and Consumer Affairs Authority was nowhere to be seen, despite its mission statement “to safeguard consumers’ interests and enhance their welfare”.

We recognise that, thanks to investment in the interconnector and natural gas, the Labour government was able to lower electricity prices. In fact, while energy bills used to top public concerns under the Gonzi administration, in all public concerns surveys held since 2013 they are hardly ever mentioned.

Yet while everyone can recognize that the bite from energy bills is less felt than under previous governments, public trust in utility providers is still based on paying what is due: and on not being overcharged.

Moreover, lower energy bills do not absolve government from ensuring both that consumers pay what is due from them, and also that it is buying energy from the private sector at the lowest price possible.  That is why transparency is paramount, both when it comes to the way consumers are charged and also in the way government is charged by private entities like Electrogas: which buys natural gas from one of its shareholders (SOCAR) to sells it to Enemalta at a fixed price for a five-year period, due to expire in 2022.

Unfortunately, on both accounts, lowering bills from pre-2013 levels has only provided Labour with an excuse for a lack of transparency.  This is unacceptable: lowering bills eight years ago does not give any government a licence to simply ride roughshod over legitimate consumer complaints and concerns.

Just as we must ensure that the government is not being over-charged by those providing energy; we also must ensure that the citizen is not over-charged by government when paying their bills. Neither the Labour government, nor the Malta Competition and Consumer Affairs Authority, can continue ignoring this reality forever.