Regulator says power companies fail vulnerable customers

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The energy watchdog has proposed a standard hardship policy across all power providers to help those who struggle to pay electricity and gas bills.

The Australian Energy Regulator (AER) said this was the first of several steps it would take this year in a fight to protect vulnerable customers.

Federal Energy Minister Josh Frydenberg said this week the proposal followed a damning report from AER.

Last year, the AER reported that many power retailers mismanaged their hardship programs and wrongly disconnected electricity supply to vulnerable customers. Among the other findings were:

  • that most retailers had deficiencies in at least some aspect of their hardship policy and its implementation
  • a wide variation in the quality of hardship policies, with many lacking specifics on how a retailer will act and what assistance they will provide to a customer
  • that some retailers were unable to report on how they had implemented their hardship policy or provide basic information on the assistance they provided
  • despite high levels of energy debt across most jurisdictions, the proportion of customers on hardship programs remains low, with most jurisdictions reporting less than one per cent of customers on hardship programs
  • just 27 per cent of electricity customers exiting hardship programs did so successfully by paying off their debt.

After reviewing the average electricity bill debt customers on hardship programs had accrued across various retailers, the AER found that:

  • customers of Origin had an average debt of $650 and 27,741 of them were on a hardship program, which equalled less than two per cent of all customers
  • customers of AGL had average debts of $2200 and more than 19,500 of them were on a hardship program, which was also less than two per cent of all customers
  • Alinta and Powerdirect customers had average debts between $2000 and $2300
  • Powershop customers had the biggest average debt of $2500
  • QEnergy had six per cent, or 287, of its customers on a hardship plan.

Under retailer hardship programs, customers who comply with an agreement cannot be disconnected, Mr Frydenberg’s office said.

Yet, late last year, one of the nation’s largest retailers, Origin, was fined $40,000 for wrongfully disconnecting the premises of a vulnerable customer after failing to offer hardship assistance.

The AER has also proposed that energy customers be provided with a clear understanding of their rights and entitlements.

“Energy affordability is a significant issue for many Australian households,” AER chair Paula Conboy said. “Customers are entitled to assistance from a retailer if they are having trouble with their energy bills and we are working to ensure they are receiving that.

“Our Hardship Review showed a wide variation in practices across retailers and a disconnect between retailers’ policies and practical assistance offered to customers.”

Ms Conboy said the law protected customers experiencing financial difficulties, including stipulating disconnection for non-payment occur only as a last resort. Customers who stuck to repayment plans could not be disconnected, she said.

“Rising electricity disconnections, fewer customers successfully completing hardship programs and high debt levels for customers not in these programs are all strong indicators that there is more work to be done to ensure customers get the required assistance.”

Have you ever been refused a plan when you have struggled to pay your power bill? Are you able to pay your power bills on time? How much of your spending goes on power bills?

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Written by Olga Galacho

26 Comments

Total Comments: 26
  1. 0
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    Hardship plans are ok up to a point – as long as the customer has the capacity to pay off the debt within a reasonable period.
    Energy companies are not a charity

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      I hope you never find yourself poor Raphael. As for Energy companies, they’re doing OK. Better to offer hardship plans, than spend thousands sponsoring sport

    • 0
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      Hardship plans are the Labour approach (not Labor), and are a stupid way to provide bandaid solutions. It is clear Privatisation has been a complete failure.

      Prevention is better than cure (especially bandaid solutions) – Govt needs to take over the Energy Supply, which is an essential service, set up it’s own independently run companies and offer electricity at controlled reasonable prices. This will help both residential and business consumers to have more control of their finances, and avoid the need for such stupid bandaid solutions. We have ample resources of all types (Coal, Gas, Uranium, Solar, Wind and Hydro) in this country, and it is only STUPIDITY by political morons which has created this situation.

    • 0
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      So you want to give Energy Supply to the Stupid Govt. (Your Words) That makes sense?
      This is the Govt.(Both Parties) that over the years has sat on their hands and watched coal fired power stations with a 50 year economical life shut down progressively, and now that it’s become critical, blame everyone else. This the same Govt. that has our GAS going to Japan and sold at a far cheaper rates to the Japanese than we pay. You should stand for parliament.

    • 0
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      I never said the Govt will RUN the Electricity companies, note what I actually said about Govt to “…set up it’s own independently run companies and offer electricity at controlled reasonable prices”.

      In the good old days that was what used to happen, and I hope all can remember that electricity prices used to be lower then?
      Of course, Govt & bureaucrat morons shouldn’t run it, it is the job for professionals but overall control by the Govt is needed so that they stick to defined KPIs – somehow I think you didn’t understand the concept, so hope I have made it clear enough.

      Maybe I should have chosen the political profession – would have got that large undeserved, untested pension without doing much work, and caused much less harm to this country! At least, I wouldn’t have sold off the Gas cheap, only a crooked politician with business connections would do that!
      MAYBE YOU CAN MAKE OUT THAT I AM AN INDEPENDENT THINKER, not tied to any political party.

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      Well said George, the government ( doesn’t matter which one) does need to take control of energy companies again, privatisation has only seen horrendous unaffordable increases for everyone, totally out of control!

  2. 0
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    What about receiving a State Gov Energy Concession to be Charge GST on that Concession.
    {;-(

  3. 0
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    If you can’t afford it simply don’t use it. That’s what I do.

    • 0
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      Correct OG
      Lots of people obviously can’t or don’t want to understand this basic rule

      Cut out all wasteful spending including energy wastage and they would never have found themselves in that situation to begin with

    • 0
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      Unless you are off the Power Grid, there are service fees meter reading fee etc plus GST Ontop. If you don’t use any electricty at all GST is Still charged.
      Go away for the Quarter of Power supply “reading” so no power used There are Fees and GST to pay.
      If you are power wise these Charges Are To High.

    • 0
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      Those fixed charges are nearly all covered by the electricity concession rebate people on welfare and low income earners get so it should cost next to nothing if you use next to nothing.

    • 0
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      The Concessions don’t cover the fixed costs, they haven’t for over 5 years now. The fixed charges have increased by over 80%, than there is the new added charges after that you add GST.
      Then you have actual power useage with added GST.

    • 0
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      OG, you obviously have no compassion and no comprehension of reality. One of those I know who is struggling is in Defence Housing (so no control over the fitted appliances and no option to install solar), and has a disabled child who cannot regulate body temperature. The air con unit is ancient and very costly to run and DHA won’t replace it. What should she do? Risk her child’s life by turning it off? Maybe stop eating, since the stove is electric and also old and inefficient? Ignore the cries of her disabled child at night to avoid turning lights on? (No LED in that house!).

  4. Profile Photo
    0
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    High time the government took action over hardship programme for customers who cannot afford to pay their electricity bill on time. The amount allocate to pay back is higher than pensioners can afford. Far better to pay small instalments per fortnight as I do. That wat you stay on top of the bill

    • 0
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      If they didn’t use it in the first place it would not be a problem. People have to take responsibility for their own actions not blame others.

    • Profile Photo
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      Lessons in budgeting and saving would help as well as perhaps appointing managers to help with spending. I suppose the welfare card is the obvious solution with counselling to help with money management.

      Yes OG there is a lot of wastage of electricity. I have one friend on a pension who has a bill of around $120 a quarter and lives well. Uses one of those gas cookers to stir fry or cook a soup or stew. Even runs to the electric blanket to warm the bed in winter for a half hour or so.

      I can’t get mine that low. Mine is around $230 a quarter.

      I can live without electricity. There’s the thing of it I suppose. Being able to make and do.

    • 0
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      Yes, I monitor our spending and while energy costs have risen, they are not our biggest area of expenditure. We aren’t big consumers of electricity spending around $300 a quarter without giving it a lot of thought. Have always turned lights off, put on extra clothes when cold, washed clothes in cold water etc. What has increased more is the cost of food which is a direct link to rising electricity and transport costs. Finding cuts to the grocery bill is more of a challenge.

    • 0
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      I have a caravan and it uses little energy. Only thing I pay for is a gas refill every fortnight as that runs my fridge and stove. All the other power comes free from the sun. So I can live on power costs of $25 a fortnight.

    • 0
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      My caravan uses $0, OG, and my house uses very little power, but not everyone has the options you and I enjoy. Have some decency! There are many who live in rented properties that are not energy efficient, and sick and disabled people who have special needs. You seem incapable to comprehending that you are privileged, and many others are NOT.

  5. 0
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    Some of the suggestions on here are simplistic and patronising. What about those who have health problems and have to use electricity, yes, some concessions available, but still fees and charges. I only have electricity in my unit. Do you expect me not to cook my food, sit in the dark, and swelter on 35 degree plus days, or freeze in winter? I would probably end up with pneumonia or heatstoke! Fortunately Origin did the right thing by me, and helped me through the thousands of dollars in arrears I had to pay when my financial circumstances were dire, and with their hardship program I now owe them only the normal electricity charges, which on their predictable plan is very afffordable.

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      No most definitely not. You need to be able to use heaters, electricity and air conditioning depending where you live and your health. Government subsidies must be available and hardship plans. I certainly had trouble with bills when I raised my children alone and often paid the bill late.

      I fortunately live in a terrific climate. My home is a log cabin surrounded by trees and garden and built for environmental features that means I don’t need air conditioning and on the few really cold nights I use a fuel stove.

      Modern homes chew up electricity and people do need to be warm or cool. Some climates are quite demanding of electricity for comfort and health requirements. Especially as we age or experience poor health or illness.

      I’m pleased to hear a good report of Origin.

      Rereading my last comment it does seem patronising and I apologise I didn’t mean it to be. You obviously dealt with the issues you had. i simply meant some people might need assistance and some form of counselling or advising should be available to those people.

  6. 0
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    What did idiot politicians expect when they privatized electricity supply? Surely they didn’t think profit-seeking businesses would allow conscience and compassion to reduce their bottom lines?

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      Yes and we were warned by the unions about it. They even posted huge yellow signs all over to tell us what would happen.

    • 0
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      Rae, the Unions and their demands were what drove Govt. to privatise the industry. Privatisation wasn’t the problem it was and still is the contractual obligations or lack thereof in the contracts that has allowed the private companies to gouge the customers.
      Same inept contracts that have Japanese gas customers paying much less for our gas than we do, even with the substantial sea transport costs.

    • Profile Photo
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      Yes Retired. By trying so hard to destroy the unions and create a casual workforce on stagnating wages the government has managed to sell the Country out to foreigners and sign losing deals with them.

      Rather than being in a bind with our own working unionists, where at least the money stayed at home, we are in a bind with foreign corporations gouging for all they can and creating a mess of foreign exchange and current account.

      Hating our home grown because they dared to demand a share of the profits has meant we are bleeding profits off shore and will all be poorer for it.


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