Battlers overcharged millions by monopoly power utility

A major electricity provider overcharged thousands of customers who were on Centrelink plans. (Brendan Esposito/AAP PHOTOS)

A state-owned utility breached its licence by overcharging vulnerable customers for electricity, a watchdog says.

Synergy, the legislated monopoly electricity supplier to homes and small businesses on Western Australia's main grid, overcharged 2845 customers almost $2.29 million, the Economic Regulation Authority said on Monday.

The utility did so by continuing to deduct Centrelink bill assistance payments after customers closed their electricity accounts, according to the authority.

The breach dates back to 2009 and Synergy has started contacting affected customers to notify them of the overcharges and arrange repayment.

About 30 per cent of the money owed has been repaid.

Synergy took more than $2m from customers through regular payments despite accounts being closed. (David Mariuz/AAP PHOTOS)

The breach is particularly concerning given Synergy's position as the state's biggest retailer and the vulnerability of customers on Centrelink, authority chair Steve Edwell said.

"As a sophisticated and large retailer, we would expect Synergy to have systems in place that would have identified these payments accruing in closed accounts, with around 1000 customers owed more than $500," he said in a statement.

Synergy breached its licence code of conduct by failing to tell customers within 10 business days that they had been overcharged.

Due to amendments made to the code's overcharging provisions in February 2023, the breach notice only applies to 459 affected Centrepay customers who are collectively owed $239,250 in payments.

Centrepay is a service used by some Centrelink customers to organise automatic deductions from their support payments for goods and services, including utility bills.

The opposition says customers have been let down by both Synergy and the WA government. (Brendan Esposito/AAP PHOTOS)

Synergy has now cancelled Centrepay payments going to closed accounts and updated its account closure process.

The company is also implementing new controls in its automated account management systems to ensure payments cannot be made on closed accounts.

WA opposition energy spokesman Steve Thomas said the state's most vulnerable people had been let down by the WA government and Synergy.

"This has been happening since 2009. That's 15 years of systemic failure, and it should have been identified and rectified long before now," he said.