A former ambassador of Malta to the EU has joined the fight over the way electricity bills are calculated and will be taking Enemalta to court claiming several breaches of European law.

This includes abuse of a dominant position since the service provider has a complete monopoly over the provision of electricity, John Vassallo, who feels “cheated and unfairly treated”, told The Sunday Times of Malta.

The former strategic adviser to the Microsoft Corporation explained that the law favoured and protected the weaker party – in this case consumers.

As things stand, in Malta consumers cannot seek another electricity provider for a better service or more affordable rates, and Enemalta could be taking advantage of this lack of competition, he added.

Dr Vassallo will also be challenging the authorities on misleading commercial advertising of their pricing mechanism.

According to local legislation, residential premises are subjected to tariffs based on the cumulative consumption per year, “which may be billed on a pro rata basis”.

Consumers may be billed this way and ARMS could even ask for pre payments, however, it cannot charge pro rata. This means, that if at the end of the year, the client has been overcharged, they have a right for a refund, he said.

According to current legislation, for every kWh of the first 2,000kWh consumed in one year, residents should be charged 10.47c, while they pay 12.98c for every kWh of the next 4,000kWh, 16.07c per unit on the next 4,000kWh, and so on. However, ARMS splits this allocation among the number of bills that a consumer receives in one year. This means that if a residence is billed every two months, the first 2,000 units are split between six bills, amounting to an allocation of 333 units per bill at 10.47c per unit.

READ: 'You're being cheated on electricity'

If a residence consumes fewer than 333 units in a two-month billing period, the remaining units at this cheaper rate are not brought forward in the subsequent bills. The allocation is lost and cannot be used in the subsequent months. If, in the following two months, a residence consumes more than 333 units, it will be charged higher rates from the 334th unit onwards. This means residents are being cheated out of paying the lower rates for the full allocation of 2,000 units.

Dr Vassallo is not an average consumer. His consumption is in a higher level but most villa or large apartment owners would be close to his usage.

He believes that over the course of five years, he has been overcharged some €2,000. If the average customer is being overcharged a quarter of what he has been overcharged, this would mean Enemalta needs to refund its 140,000 customers a total of €14 million per year, he added.

Dr Vassallo added that the courts could also slam Enemalta with a fine equivalent to up to 10 per cent of its turnover.

Consumers cannot seek another electricity provider for a better service or more affordable rates

He is looking into starting a class action, through which all Enemalta customers would be represented by the consumers’ association and will also file a complaint with the EU and Malta consumer authorities to investigate Enemalta’s abuse of its dominant position.

Dr Vassallo is not the first to challenge the authorities in court.

Earlier this month, this newspaper reported that Darren Cordina and Melvin Polidano challenged the authorities for breaching EU directives. These call for the calculation of bills to be based on actual annual consumption and a refund given if the customer has overpaid.

Their lawyer, Maxilene Ellul, claims the method of computation breaches at least four directives that call for transparency and fair treatment.

Fears that customers are overpaying on electricity due to the billing method were recently flagged up on social networks, as people started receiving more frequent bills.

Economist Marie Briguglio, who has been very vocal on social media about the issue, has insisted that billing frequency matters.

When a quota is cut up in absolute parts, consumers lose the flexibility to use up the allocation (such as 2,000kWh at 10.47c) when the consumer needs them.

One reader whose energy consumption spikes in the initial months of the year because he has to keep the house warm for health reasons got a “nasty shock” when he suddenly started being billed every two months.

Speaking to The Sunday Times of Malta, he said he bill, totalling more than €1,600 for two months, showed nearly 1,200 units charged at the highest rate of 61c each.

He noted that a previous bill totalled €1,750 for a six month period, with no units charged at the highest rate.

He was initially told by a customer representative to request switching back to a six-month bill, but was then told that ARMS could not reverse actual readings in order to issue a bill for a six-month period.

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