Energy Consumer Reforms ‘Transformational’ say Consumer Advocates
Major reforms in the consumer energy market announced today by the Essential Services Commission (ESC) will have a positive and transformational impact for thousands of Victorians say consumer advocates.
The suite of reforms announced by the ESC are part of the Energy Retail Code of Practice review and will provide significant relief to Victorians experiencing payment difficulty with their gas and electricity bills.
What’s changing?
- Retailers will be required to automatically switch their customers to their best offer if they are receiving payment difficulty assistance or have accrued arrears over three months of $1000 or more
- The minimum debt amount for a disconnection process to begin has been increased from $300 to $1,000
- Increased penalties for retailers who don’t meet their obligations or impose unfair ‘loyalty taxes’ to their customers
- Other changes include protections for customers paying higher prices and improving the application of concessions on bills.
“I am delighted by these reforms -the strongest energy consumer protections of their kind in the country- and congratulate both the ESC and Victoria’s Minister for Energy and Resources Lily D’Ambrosio for their vision,” said Consumer Action Law Centre CEO, Stephanie Tonkin.
Some of the reforms will save Victorians an estimated $27.8 million in electricity and gas prices each year – if retailers meet their new obligations.
“Money saving changes like these are especially important for households struggling to meet the costs of living,” Ms Tonkin said.
Increasing the debt threshold for disconnection to $1,000 will have a measurable impact on people who are doing it tough.
“This reform alone will help prevent many Victorians from falling into hardship or feeling pressured to pay an unaffordable payment plan, for fear of being disconnected,” she said.
“These reforms come at a time of energy retailers making record profits – with over $1.64 billion made by the top three retailers in just the 2023-24 financial year.
“Energy retailers know some of their customers are doing it tough and can’t pay off the levels of energy debt being accrued – these new measures will help to ensure retailers are supporting customers in need.”
Quotes attributable to Zyl Hovenga-Wauchope, CEO of Financial Counselling Victoria:
“These amendments are an important and much-needed step to protect the rights of vulnerable energy consumers.”
“Making sure people in payment difficulty are automatically placed on the best offer just makes sense. There’s little value in being on a payment plan if you’re not also receiving the most affordable rate available.”
“Our Rank The Energy Retailer report identified key gaps in hardship support for vulnerable households, and these reforms work towards closing those gaps. The work is not yet finished. We look forward to working with the Essential Services
Commission to shape strong monitoring and evaluation for these important reforms.”
Read our previous submission: Energy Consumer Reforms Consultation – Consumer Action Law Centre
ENDS
Media contact: Mark Pearce mark@consumeraction.org.au Tel: 0413 299 567
