Updated 1.30pm with NAO statement

A draft report by the National Audit Office (NAO) has found that consumers could have paid “extra charges” totalling €6.5 million on their electricity and water bills.  

The NAO strikes a cautious tone in the yet unreleased report, despite finding a variance of €4.6 million in electricity bills and €1.9 million variance in water bills.  

“This office analysed the variance arising through pro-rata billing against annualised billing. This office could only elicit these variances but is restricted from commenting on the results since this issue is subject to litigation within the courts of law and, therefore, pertains to a sub-judice case,” the draft report reads. 

A legal challenge was mounted by two consumers in 2019, who are arguing the calculation of their bills on a pro-rata basis rather than an annual one was leading them to be overcharged by ARMS, the state utilities billing arm.  

The Nationalist Party has also claimed its own studies on overbilling found 80 per cent of the 1,250 bills it analysed contained some sort of “mistake” in the way the tariffs were calculated.  

The NAO’s findings were part of a wider audit into the effectiveness of smart meters and water radio frequency meters.

From a sample of electricity accounts taken by the NAO, a variance of more than €10 was found in 32 of the 85 accounts reviewed. The range in the difference between pro-rata and annual billing was between €10.74 and €468.90. The latter amount was said to relate to a user with heavy electricity consumption. 

80 per cent of 1,250 bills analysed contain some sort of mistake

According to the NAO’s findings, 46 per cent of the analysed accounts did not reveal any significant variance between the two billing methods, with the difference between the two calculations being less than €2.  

Extrapolating these results on the total 324,501 electricity accounts, the NAO said this will result in a difference of €4.6 million between the pro-rata and annualised billing, leading to “extra charges to consumers”. 

A similar extrapolation exercise carried out on water bills found a €1.9 million variance across 294,613 water accounts.  

NAO: Report is a 'draft working copy'

Contacted by Times of Malta about the findings, a spokesman for the NAO said it was neither ethical nor appropriate to comment on assignments which are still ongoing.  

“It is planned that this report will be issued shortly”, the spokesman confirmed.

In a second statement sent to Times of Malta following publication, the NAO reiterated that its report was a "draft working copy", not final and did not constitute the NAO's official position.

"The NAO solicits comments from audited entities by forwarding its draft reports under confidential cover. The distribution of this documentation is restricted to officials who are in a position to contribute towards the final version of the report," it explained.

The Energy Ministry, asked if tariffs calculations will be revised and the overcharged amounts refunded, failed to give a clear answer.

“Legal Notice 164 of 2009 established the tariff system introduced in June 2009. Maltese households know that the only change that was implemented by this administration was a 25 per cent reduction in electricity tariffs,” a spokesperson said. 

“In fact, Maltese households enjoy the fourth cheapest bills in the EU as confirmed by Eurostat in April.

“Meanwhile, it is naturally premature to comment on any potential draft reports that may result from an ongoing audit process between the NAO and the concerned entities”.

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