Understanding the ins and outs of utility charges
03/11/2015
In the Residential (Land Lease) Communities Act 2013 electricity, gas, water and sewerage service are dealt with under the generic term ‘utility’.
Home owners are only required to pay the operator for use of a utility if the use is separately metered or measured and the operator provides an itemised account (except sewerage – see below).
The new Act requires an operator to give home owners at least 21 days to pay a utility account. The operator can charge a home owner a late fee if the account is not paid on time, but only if the home owner entered into a new site agreement after the Act commenced.
The Act provides for a reduction in site fees if a utility that was not separately measured or metered becomes so, or if the utility is no longer available for the home owner’s use. So, if for example water charges are included in site fees and the operator installs water meters, affected home owners are eligible for a reduction in site fees. The operator must notify the home owners of the change and the new site fees payable. Any site fees overpaid as a result of the change must be refunded.
The operator is required to provide home owners with reasonable access to bills and documents related to utility charges and provide receipts at the time of payment or if requested by a home owner.
Electricity
A Service Availability Charge (SAC) still applies to the supply of electricity to residential sites.
The Residential (Land Lease) Communities Regulation 2015 (the regulation) sets maximum SAC for electricity supplied by the operator where the supply to the site is less than 60 amps. These charges reflect the current charges prescribed by the NSW Fair Trading ‘Customer Service Standards for the Supply of Electricity to Permanent Residents of Residential Parks’.
The operator cannot charge a greater rate than that charged by the local area retailer and where supply is less than 60 amps the maximum rate for the SAC is as follows:
- Less than 20 amps – 20% of the SAC
- 20 amps to 29 amps – 50% of the SAC
- 30 amps to 59 amps – 70% of the SAC
Since 1 July 2013, the National Energy Customer Framework (NECF) has applied to the supply and sale of energy to retail customers. Operators supply electricity to home owners as exempt sellers under this framework and they are required to comply with the ‘Exempt Selling Guideline’.
Water
The only change to water charges is that the Act now says that water usage must be ‘measured or metered’ whereas the Residential Parks Act only referred to metered usage.
The combined service availability charge for water and sewerage is calculated by dividing the service availability charge payable by the operator to the service provider by the total number of sites connected to the utility (including holiday sites) in the community. However, the maximum combined service availability charge for water and sewerage is $50 per calendar year.
Sewerage
The Residential Parks Act did not permit operators to charge residents for sewerage ‘usage’ because it is not separately metered. This is not the case under the new Act because the regulation provides an exemption to the requirement for separate metering for sewerage services and a method to calculate the charges.
The regulation enables operators to pass on sewerage usage charges only if:
- water and sewerage services are supplied to the operator by a water supply authority
- the water supply authority charges for water and sewerage services separately
- the water supply authority specifies a sewerage discharge factor either in the bill or in another reasonably accessible way
- water usage at the residential site is metered or measured
- sewerage usage at the residential site is not metered or measured
If all of these circumstances apply then the following calculation is used for sewerage usage: Volume of water used at residential site multiplied by relevant sewerage discharge factor.
Example
John uses 20 kilo litres (kl) of water over a 12 week period.
The relevant sewerage discharge factor is 25%. 20 kl x 25% = 5kl.
John can be charged for 20kl of water usage and 5kl of sewerage usage at the rate charged by the operator’s water and sewerage service provider.
Water supply authorities set sewerage discharge factors and they are not all the same so home owners who are required to pay sewerage usage charges will be differently affected.
Remember
Only home owners who sign new agreements under the Residential (Land Lease) Communities Act 2013 have to pay sewerage usage charges. And, if you start paying sewerage usage charges the operator must reduce your site fees.