An electricity bill of over $18,000 has put the spotlight on the practice of "back billing" in the electricity industry.

The UK has introduced a 12-month time limit on back-billing, putting the onus on the power retailers to issue correct bills.

Australia has a nine-month limit.

But here in New Zealand there is no limit, so if a power company gets its billing wrong, it can claim payment for inadvertent under-charging going back years.

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The shockingly large bill came to light through a complaint to the Utilities Disputes scheme from the owner of a small business.

She received the bill for $18,481.27 for electricity after her power provider discovered it hadn't billed her correctly over a three-year period.

The massive bill landed in April last year, Utilities Disputes commissioner Nanette Moreau said, covering electricity used between September 2013 and October 2016.

SUPPlIED Utilities Disputes commissioner Nanette Moreau.

The retailer believed the back-bill was $18,481.27, but offered to accept the lower sum of $13,554.80.

The retailer then offered to halve the back bill, if the woman agreed to pay it.

Moreau said cases of huge back bills continued to come through, despite the roll-out of smart meters, which feed customer power usage data automatically to electricity providers.

Moreau was currently working on another massive back bill complaint over a demand for $34,000 to a business.

Moreau said it made sense for there to be a time limit on back-billing, and it could be one of the issues she raised in the on-going electricity price review.

Overseas there are words for the horror a giant back bill causes.

"In Australia they call it 'bill shock'," Moreau said.

"For a consumer $5000, or $1000, might have as much impact as a $30,000 back bill would have on a company.

Electricity companies have powerful data management systems, and the business owner who got the $18,481.27 bill shock told Moreau she should not have to pay.

The business owner believed the retailer should bear the cost of sending her incorrect bills.

Power providers' contracts generally obligate homeowners and business owners to pay for the electricity they use, even if the power provider has failed to bill for it correctly.

But when she makes decisions, Moreau is allowed to take into account what is fair and reasonable, as well as what electricity service contracts say.

In the case of the $18,481.27, the retailer's terms and conditions allowed it to bill for estimated use and to back bill, if the estimate was inaccurate, with no time limits on the back-billing.

The UK's gas and electricity regulator Ofgem imposed a limit of 12 months on back-billing earlier this year.

It followed a review of electricity pricing sparked by public anger at rapidly rising power prices.

The review identified that poor billing practice in the UK was leading to some British households receiving large back bills.

It found the average back bill was for £1160 (NZ$2120).

"Put simply, a supplier can't seek additional payment for unbilled energy used more than 12 months prior to the error being detected and a corrected bill being issued," Ofgem's amended rule says.

"The protection may not apply if you have behaved obstructively or unreasonably which prevents your supplier from accurately billing you. For example, by physically blocking more than one reasonable attempt by the supplier to take a meter reading at your property or if you have stolen gas or electricity."

The justification for the move was to put the onus on the power companies to improve their billing systems so customers did not find themselves with big power debts.

"Getting billing right is an essential part of customer service, and it's unfair that consumers should be left out of pocket," said Rob Salter-Church, Ofgem's interim senior partner for consumers and competition.

Moreau urged households and small businesses to keep an eye on their power bills, which increased the chance of them spotting anything unusual.

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