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Power Board decision to disconnect power unreasonable in the circumstances

Regulatory and investigative agencies
Ombudsmen Act 1975
Legislation display text:
Ombudsmen Act 1975
Power Board
Sir John Robertson
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Electric Power Board decision to disconnect power to a consumer’s home unreasonable

In this case an Electric Power Board disconnected electricity supply to a bankrupt’s home in an attempt to secure payment of a debt incurred at business premises.

The complainant advised that he had been the owner of a takeaway business in a small rural town and that because of the economic conditions prevailing business had declined and he had been declared bankrupt. The Electric Power Board threatened to disconnect the power to his home if the electricity account for the former takeaway premises was not settled.

With all his assets in the control of the Official Assignee, the situation for the complainant was compounded as winter approached.

On receipt of a final notice from the Board the complainant again advised them that he was not in a position to clear the debts of the takeaway business and pointed out that the account for his home was in credit. The Board advised that that was of no moment and when the power account for the business premises was not paid within three days the supply was disconnected to the complainant’s home. When he contacted the Ombudsman, his family had been living in difficult circumstances with the onset of winter, they were cooking on gas burners and had no electric power to light the household or heat it.

The Ombudsman immediately notified the complaint to the Board and they advised that they believed their action in disconnecting the supply was legal. The Ombudsman concluded that the authority’s action appeared to be within the law because the Electricity Supply Regulations 1984 do not differentiate between whether electricity is supplied to consumers in their homes or at their business premises and any contract is with customers personally as consumers rather than to them as occupiers of separate premises. However, notwithstanding that the actions of the Board appeared to be in accordance with the law, the Ombudsman formed the view that the circumstances were such that the Board had acted in a way that could not be considered reasonable. It had not taken into account the fact that the complainant did not have access to the monies of the business nor that the account for domestic supply to his house was in credit at the time that the supply was disconnected. The decision to disconnect the power to the house had not taken account of the circumstances of the case. While such a policy may well be reasonable in some circumstances, the Board was not in the Ombudsman’s view entitled to adhere blindly to the policy of disconnection if special circumstances arose. In this case the complainant had a large debt from the takeaway business and was only in receipt of a social welfare benefit as a source of income. With his domestic account in credit it was a surprising decision for the Board to have made. The consequences of the Board’s attempt to get preference over other creditors were burdensome and oppressive and they could easily have been foreseen by the Board. The complainant’s personal circumstances had not been differentiated from the circumstances of the bankrupt business and the circumstances warranted that distinction being made.

For these reasons the Ombudsman advised the Board that he believed their decision to disconnect the power supply was an unreasonable decision given all the various factors involved in the case. The Ombudsman recommended that before making such decisions to exercise the discretion the law provides in such circumstances, the Board should in future consider on an individual basis each case when bankruptcy occurs. The recommendation was accepted.


Power Boards no longer exist, however many aspects of power transmission, generation and retail remain under government ownership as State Owned Enterprises.

This case note is published under the authority of the Ombudsmen Rules 1989. It sets out an Ombudsman’s view on the facts of a particular case. It should not be taken as establishing any legal precedent that would bind an Ombudsman in future.

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