Consumer Action’s new landmark report shows that the Victorian Government’s new policies are reducing energy disconnections, but energy companies are still falling short addressing consumer vulnerability.
The Energy Assistance Report: tracking how Victoria’s changing energy policies are impacting households in the state, analyses data from calls that have come through the Victorian arm of the National Debt Helpline. It finds that the Victorian Government’s ‘Payment Difficult Framework’ has helped to significantly decrease disconnections, but some energy companies are still giving vulnerable customers the cold shoulder.
Report Key Findings:
- Energy disconnections have significantly reduced following the implementation of the Victorian Government’s Payment Difficulty Framework from 1 January 2019. The Payment Difficulty Framework was a major reform to energy regulation in Victoria. It created new requirements for energy retailers to assist people when they have difficulty paying a bill. Since the policy was implemented, zero disconnections have shown up in our sample of calls to the National Debt Helpline. Our data also shows that there has been a reduction in people with very large bills contacting our service and less inappropriate referrals since the new requirements were introduced. This does not demonstrate causation but is nevertheless a positive result.
- Energy Companies are still failing to comply with some aspects of the Payment Difficulty Framework. There are still examples of poor practices and the Essential Services Commission must take compliance and enforcement action to hold energy companies accountable and protect Victorians who are most at risk of losing access to essential energy services.
- Early intervention is important because energy debts can spiral out of control. Energy debts are the ‘canary in the coalmine’ for financial hardship and they lead to other debts when not adequately addressed with early intervention. Energy retailers have a social responsibility as essential service providers to assist people who are unable to pay their energy bills. This is formalised in the Payment Difficulty Framework.
- There is a strong relationship between receiving a Centrelink income and issues with energy debt. If the Federal Government was to raise the single rate of Newstart, Youth Allowance and other related payments by at least $75 a week, it is likely that the number of people struggling to pay their energy bills would decrease.