Energy cop damning on retailers

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

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