Thousands struggling to pay power bills

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Ms Flynn lives on a pension in the suburb of Chigwell with her three grandchildren — two teenagers who she cares for and another in their twenties who lives independently in a flat out the back.

The family has spent a bit more time at home in the last few months, with the pandemic causing local sport to be cancelled and many social activities wound back.

But nothing prepared Ms Flynn for her winter power bill, which went up by a whopping $900 compared with last winter, to $2,500.

“I just burst out crying,” she said.

“You don’t reduce me to tears quickly, but that bill reduced me to tears because there was no way I ever thought I’d ever have a bill that huge.”

Consumer advocates have long feared a double whammy of larger winter heating bills combined with higher energy usage due to people spending more time at home during the pandemic.

Now it appears those concerns are being realised.

The industry estimates residential energy consumption has risen between 15 and 20 per cent due to the pandemic.

Craig Memery from the Public Interest Advocacy Centre (PIAC) said many people were reporting bill increases in the hundreds of dollars.

“The nub of the problem is that people have been required to be at home, they’ve lost jobs, they’ve lost income,” he told the ABC.

“And at the same time, people are using a lot more energy.

Powerlines in front of a new housing development in outer Sydney.

The combination of winter weather and people spending more time at home has hit household power bills.(ABC News: Brendan Esposito)

“In March, we did some analysis and estimated that some people were going to have energy bill increases in the order of $200 a month, and we have seen that come to fruition since, particularly in the colder winter months.”

He said some people were taking extreme measures to ensure they could pay their bill.

“We see people going without essential energy use for heating, for cooling, for heating water so they can clean and shower,” Mr Memery said.

“We see people taking on payday loans and unsustainable loan options to allow them to pay their bills and they often come with exorbitantly high interest rates that place people in worse and worse debt.”

Rising debts, thousands deferring payment
New data from the Australian Energy Regulator (AER) shows almost 200,000 people across six states and territories are on payment plans, or have deferred paying their bills altogether.

The AER introduced deferrals as an industry guideline in March, so people who couldn’t afford to pay their bills during the pandemic could avoid being disconnected.

The data doesn’t capture customers in Western Australia or the Northern Territory, which aren’t part of the National Energy Market (NEM).

Western Australia does not have any data available from the pandemic, while NT retailer Jacana said a small number of its 80,000 customers were on payment extensions or had deferred their bills.

The industry and its regulator said despite the challenges of the pandemic, energy retailers had responded swiftly to ensure people stayed connected.

But AER chair Clare Savage said the rising amount of household energy debt was concerning.

Clare Savage stands in a park.

Australian Energy Regulator chair Clare Savage says thousands of people have asked for bill deferments and hardship plans during the pandemic.(ABC News: Amy Bainbridge)

“We look at the 90-day debt data — that’s when you’ve had a bill outstanding for 90 days or more — [and] the average debt for those customers was about $960 in March,” she said.

“It’s increased to over $1,100 now.”

In September, AER data showed more than 45,000 residential and small business customers had deferred their bills due to the pandemic, worth about $23 million in total.

The debt deferrals are in place until at least the end of October.

Sarah McNamara from the Australian Energy Council, which represents the industry, said retailers had so far been able to shoulder the financial burden of the debt deferrals due to various industry measures such as delaying payments on network charges.

But she said if customers could make even a small contribution to paying off their bill, they should.

“Mounting debt levels are bad news for customers and bad news for retailers as well,” she said.

“What we want to say is, when [customers] can pay, that they start paying those bills and get on payment plans, so they’re chipping away at their debt levels over the coming months.”

Ms Savage said the impact of winter bills had not been as bad as had been anticipated, thanks to JobSeeker, JobKeeper and state government concession and support programmes.

Advocates worried about months to come
While the industry and its regulator said the support measures in place softened the blow of the pandemic and winter bills, PIAC said people were struggling much more than the data showed.

“People prioritise paying their household energy bills in much the same way that they prioritise things like rent,” PIAC’s Craig Memery said.

“So what we’ll see is a debt problem … [which] hides a much, much bigger problem of sacrifices that they’re making in other parts of their life.”

He’s worried the true impact will be felt in coming months, as support mechanisms are wound back.

In Hobart, Kathy Flynn said her retailer Aurora Energy didn’t give her a clear reason why her bill had increased so dramatically.

Ms Flynn had received an expensive winter bill back in 2018, but had since had an energy audit on her home and managed to significantly reduce her costs the following year.

She said she was unsure why her bill had gone back up this winter.

“When I asked why it was so high, [the customer service representative] just said ‘because of the COVID-19, everyone’s staying at home and the kids are at home and that’s why the bill has risen’,” she said.

But Ms Flynn said their lifestyle during the pandemic hadn’t changed enough to justify such a large rise.

“I’m always at home, and the kids are going to school, so nothing has really changed,” Ms Flynn said.

“She said that ‘the only other thing is that everyone’s threatening to go to the ombudsman, you have a choice to do that’.”

Aurora Energy told the ABC that it was a proud Tasmanian organisation that was committed to helping its customers “during these tough times”.

“Ms Flynn has been provided with significant support from Aurora’s $5M COVID-19 Customer Support Fund, and with tools to ensure she is able to manage her energy usage moving forward,” the company said in a statement.

Ms Flynn recently had a meter installed free of charge, which she hopes will go some way towards the family monitoring its energy use in real time and cutting costs.

Industry implores customers to trust them to help
Craig Memery said until recently, energy retailers ranked below banks in terms of consumer trust.

He said many people felt anxious about reaching out for help.

“Trust needs to be earned, and now that’s coming back to bite them in a situation where all of the good intentions that the industry might have are going to be hard for people to actually take on face value,” he said.

“I do believe that some energy retailers are actually doing their best to try and support people through the pandemic.”

He said retailers needed to make sure their customers were on the best deal possible.

“The way the whole energy retail market has worked in recent years has actually relied on people staying on deals that aren’t good for them,” he said.

“If retailers want to earn trust, they’re going to have to reverse that and make sure that people are on the best deal for them.”

Sarah McNamara stand in a park and smiles at the camera.

Sarah McNamara from the Australian Energy Council, which represents the industry, says there are a range of measures to help customers.(ABC News: Amy Bainbridge)

Sarah McNamara from the Australian Energy Council said retailers had been trying hard to reach those in need.

“We don’t think it’s a good result for customers or retailers if debt levels are rising without some customers paying anything at all, that just makes the situation more stressful for everyone,” she said.

“Retailers are working really hard to communicate with their customers and their phone lines are open to have that conversation that will help people start to pay down those bills, even if it’s just a small amount per week.”

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167 Comments

Total Comments: 167
  1. 0
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    I turn my hot water off and then on when the sun shines, the freezer also is turned off and not opened then turned on when the rates are cheaper at night. I have a wood fire so that is warmth in winter. Never use the oven either.

    • 0
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      Ducky, you will eventually reach the point when even all these measures still won’t be enough. Living costs are continually rising and any hopes of affording a couple of life’s little luxuries are dashed each time you receive the next electricity, rates, insurance, vehicle registration, fuel, etc. etc. My latest “shock” was the yearly insurance premium which has increased by $600 p.a. There is very little wriggle room left in the kitty to keep affording to pay the ever increasing amounts required for any of these bills. Nobody is receiving comparable amounts in their incomes or their Pensions.

      What’s next Ducky? Eventually, will we be reduced to rubbing two sticks together to cook our food over an open fire ?

    • 0
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      The insurance premium increases are more of a concern to me than the cost of power. Ducky’s system might work but I doubt that I would be saving much money, and I do not have a wood heater, would not even know whether our council would allow one in the first place.

  2. 0
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    The rest of the population is finding out what pensioners live with daily, staying at home creates killer power bills. Welcome to our world, Australia. When the pandemic is over, pensioners will still be stuck with exorbitant power bills and an unrealistic pension to pay for it. All the talk from pollies about lowering power bills by privatisation, competition, accountability, self regulation and any other spin from the government’s waffle factory is as effective as using razor wire for toilet paper……it leaves us not only still in the poo but suffering while trying to manage with something which will never work.

    • 0
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      Ozirules, why would you suffer with high power bills if you have the power to choose your supplier and the discounts they offer. If you’re in NSW, then you have this power. Do a comparison with what you’re now paying and if another supplier is cheaper, then challenge your supplier to give you a larger discount. That’s the only way that I can afford my bills. I currently receive a basic 3% and an extra 29% discount on my electricity account just because I did a supplier comparison. If you’ve been with the same supplier, then challenge them to give you a ‘thanks for being with us’ discount, like your car and contents insurer can do.

      I have a strict budget and put the funds for my bills away in a savings account with interest every fortnight. This means that I have the funds to pay for the bills when they arrive – no problems.

      I also don’t drink alcohol, smoke, or gamble. It’s my choice, but I know how much I save from not doing these.

      I live on a single DSP, so I know what I’m talking about with the unrealistic pension.

    • 0
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      Suzi,
      It is all smoke and mirrors with the power companies. They offer you lower rates on one charge but they are higher on another charges. The company you are with will not negotiate a cheaper rate until you actually leave them then suddenly they offer you abetter rate to get you back. This is true because I have experienced it a couple of times.

  3. 0
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    I sat in the cold for two weeks because I ran out of wood. But, I managed and I never light the fire anyway unless it gets down to 6 degrees. Just put on a big coat and a hat. From what I read most pensioners seem to get very good at managing on as little as possible. B UT I have had to give up my one treat, my morning coffee and muffin. I do miss the companionship that would bring.

  4. 0
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    pensioners only received $215 cost of living concession and unlike jobseekers and newstart and single parents the disabled .carers ,and pensioners are home virtually 24/7meanwhile the people who had lesser bills as not home 1/3 of the time so there fore lesser bills got $715.Even if they are home 24/7 then why are they getting paid 3 times as much for what the pensioners are already doing.THIS govt cannot give an increase to pensioners but they can afford $400 per employeee to companies for 6 months and after 6 months start again The pensioners should have been given the increase before every one else as they are home all the time and have bigger expenses
    nedicine ,doctors, delivery expences electricity gas.The people who now stay home due to unemployment and the virus are catching up to bills pensioners already would be paying if they did not sacrifice things like heating and cooling and bathing to try to make ends meet and due to discrimination from this GOVT about the elderly and people who were in aged care . It seems to me the govt would rather see THE DISABLED CARERS AND PENSIONERS DIE THAN HELP

    • 0
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      jobseekers were deservedly nearer the front of the queue for the covid social security increases

    • 0
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      Pensioners received an extra $1500 NOT $215 and are due to receive two lots of $250 over the next few months. And why would this just past winter be any different for pensioners than the year before? For most, life would not have changed that much – unless you were in Melbourne!

    • 0
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      KSS – my mates in Melbourne save even more money now, they cannot really go anywhere, have not seen son and daughter for months because they are only allowed 5 km away from home to go shopping. Clubs and pubs are out so no spending money for entertainment. Decided to upgrade their place despite them being in their 80s.

    • 0
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      KSS,

      Mitch is not talking about the $1500 Covid payment he is talking about the state government concession to help with power etc.

  5. 0
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    Information for people living in NSW who are experiencing financial difficulties paying their energy bills (ie electricity and/or gas) .You may be eligible for a one off, financial help in the form of vouchers from the NSW Government.Enquire with Service NSW Ph:137788

  6. 0
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    Live in the tropics and have rooftop solar like I do and power bills are close to zero.

  7. 0
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    Well anyone with a bill that big needs to seriously consider what the heck they are doing. We are a family of 4 with multiple computer’s running 24/7 and air con, dishwasher and drier and the most during winter we have had a bill is $400 including recent winter. Paying a mortgage, rates, insurance for home and car, life insurance plus funeral insurance all on 2 pensions. If you can’t budget well, contact the National Debt Hotline for free advice. Yes, feel sorry for people but they need to take some responsibility for things causing stress.

    • 0
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      Exactly, $2,300 is ridiculous. Ours with just two people is $80/$90 a month. Maybe they are one of the people who don’t shop around for a good deal.

    • 0
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      There should be payments for the two grandchildren and the 20 year old needs to pay their own power bill.

      It is ridiculous unless it’s a huge house with no insulation draining an air conditioner or even some heating less economic. I’d be asking for a check on what is happening.

      I’ve been home all winter and heating came in at $200 extra for the quarter and I didn’t stint on it at all.

    • 0
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      With you Greg, our bill is $3 to $4 a day, depending on the heating in winter, no cooling needed in summer. There is definitely something wrong with a power bill of that magnitude. Needs checking out perhaps as someone might be siphoning some off.

  8. 0
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    Whoa,,,lucky I moved to SE Asia 10 years ago.
    My monthly electricity bill is $15 a month on average. Unlimited internet $13 a month & gas cooking $3 a month. Beers 60 cents and if your a smoker $1 a packet. Local cigs 75 cents a packet.
    Good thing I can’t get back there.

    • 0
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      Yes Keith.
      Australia had an Income and Prices Accord but it seems the Prices part was completely forgotten.

      Then the CPI tells us prices are apparently falling.

      I’m not sure where these people are shopping but they need to let us know so we too can share the price falls with them.

    • 0
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      Nice place as long as you are healthy, Keith. Smokes no longer interest me and if I want to drink Vietnamese beers Aldi here 500 m away has it for $26 Rivet Gold or $29 Rivet Full Strength. Things are cheaper if you get workers for peanuts; I had lovely stays Thailand, Vietnam, Cambodia and Indonesia. Not the some prices, however, if you chose Singapore and Malaysia, the latter still affordable.

  9. 0
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    Interestingly the AEMO, and the AMSC, the two major operators of the East Australian electricity Grid, have announced over thelast cuppla years the enormous amount of cheap electricity provided to the retailers from Renewable Sun and Wind power, yet those savings do not seem to have been passed on, despite some agitation on the subject.
    I gather some old stick in the muds who have incorrectly argued for decades that renewable energy would always be horrendouly expensive are fighting to retain their illusions and saying there could not be anything to pass on.
    Well the retailers don’t object, they buy cheap and sell at the old expensive rate, and now the more expensive gas power will come in, so they will claim their expenses have gone up, – correctly, but shouldn’t the expenses have come down first?
    The expensive gas power is not here yet.

    Either way, the fossil fuel industry is screwing the poor and the industrial section, – what of it hasn’t been closed down by the successive Govts of Australia, so it is no wonder that electricity bills have gone up, while wages have been stagnant, so pensions haven’t gone up either.

  10. 0
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    Slow Mow said power prices where on the way down, perhaps the man tells fibs.

    • 0
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      Yes they went down 1st July by about 2 cents per kw which equals bugger all! Govt needs to take back utilities by force if necessary, I’m too old to be sitting in the cold for months on end and we shouldn’t have to!

    • 0
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      Mine didn’t Mine went UP by 2c KWH.

    • 0
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      Youngagain – Did you look around for a better deal? There’s so many providers now abetter deal is very likely to be there somewhere.

    • 0
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      No better deals around, Greg, because the deciding factor for me is the solar rebate and my supplier offers way better than any other in this area.

    • 0
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      Floss, my friend said at least 5 cents, but 5 cents on the input side is then translated through all the grasping hands thereafter, – either way, and a lot of those grasping hands have no hold on renewables, so could be more, – but not my area of expertise, as you know.

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