When a Sydney unit block found its gas bills had increased more than 10,000 per cent - from $97 to $10,377 - in one year, the building's chairman described it as "the biggest scam in NSW".
Michael Heaney's declaration, in February this year, came almost three years after he first began scrutinising the estimated gas billing methods at his building Maestri Towers, on Sydney's Sussex and Kent streets.
He says the "catastrophic mess" is the result of repeatedly incorrect estimated meter readings and a "total lack of communication" between customers, the retailer, AGL, and the infrastructure company that owns the gas pipelines, Jemena.
Now AGL has launched proceedings against Jemena in the Supreme Court, alleging a failure to provide timely meter readings over the past two years for customers across the NSW gas distribution network that Jemena manages.
A gas bill from AGL received by Michael Heaney and Barbara Richards showing the massive increase. Photo: Supplied
"As a retailer for these customers AGL knows this is frustrating for our customers. We're doing this to hold Jemena accountable and encourage Jemena to improve its service," AGL said in a statement to Fairfax Media.
While the Maestri Towers case does not form part of AGL's claim in the Supreme Court, it is symbolic of the broader issues AGL raises.
Billing problems at the Sussex and Kent Street towers began when residents first started contacting Mr Heaney to report that their gass bills had increased by "three, four, five hundred percent".
Michael Heaney and Barbara Richards, who live in a Sydney apartment block, which has had ongoing issues with estimated gas bills. Photo: Ben Rushton
"By this June we'll have kept three years of evidence proving that the meter reads were wrong and they were only doing estimates."
He cites yearly cost variations of $24,303.56 in 2015, to $1,393.88 in 2016, when the ombudsman began overseeing accounts.
AGL has launched proceedings against Jemena in the Supreme Court, for its failure to provide timely meter reads in NSW over the past two years. Photo: John Woudstra
"Say there was a family living in a unit, with two adults and three kids," Mr Heaney said. "Their gas bill would be a certain amount.The next year they move out and a single person moves in. Their bill, because it's an estimate on the previous year, would be monumental."
The AGL court action follows a finding by the Australian Energy Market Operator in March last year that Jemena had failed to meet the "non-daily gas meter reading" delivery obligations of the NSW and ACT Retail Gas Market Procedures between September 2015 and January 2016.
The AEMO found that the late delivery of meter readings "affected market participants...particularly their billing processes", which left retailers to "estimate a large number of reads" to meet customer billing schedules.
While the AEMO acknowledged that January 2016 results may have been impacted by storms, it found the overall breach had "a material impact on multiple market participants and the NSW/ACT retail gas market as a whole".
In a statement to Fairfax Media, a Jemena spokesman confirmed it was in court proceedings with AGL.
"Resolving metering and billing issues has been the absolute top priority for Jemena for some time," he said.
"We are very aware that some of our customers have recently experienced difficulty and frustration...and we are committed to helping resolve these complex issues effectively and as soon as possible."
Between November 2016 and February this year it is understood Jemena improved its reporting of meter data from 70 per cent within two business days, to 97 per cent.
A Supreme Court directions hearing is scheduled for May 26.
While Maestri Towers is not within the scope of the upcoming court action, Mr Heaney said it highlights the "major problem with gas meters in NSW".
"AGL has refused to speak with us...Though Jemena have been making a big attempt, coming into the building and doing a complete analysis of the whole meter."
The Maestri Towers owner's corporation is requesting a refund from AGL of $240,520.34; a total of the charges in dispute due to the "questionable reliability" of meter data.
"If AGL and Jemena cannot accurately record meter usage then they cannot charge for it," Mr Heaney said.
- Sue Williams