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Consumer Action Law Centre has welcomed the Victorian Government’s announcement that it has directed the Essential Services Commission to conduct an investigation into the underlying causes of energy disconnections.

Energy prices have risen 45 percent in the last three years alone and incomes and pensions haven’t kept pace – for those already living hand to mouth, it means energy has become increasingly unaffordable.

‘We need energy for so many day-to-day activities – washing, cooking, heating, and cooling.  It’s the definition of an essential service, and we’re pleased the Minister recognises the importance of keeping low-income Victorians connected,’ said Denise Boyd, Director of Policy and Campaigns at Consumer Action.

‘It is a sad fact that in 2014 we are seeing more people sliding into fuel poverty; a rise in disconnections is a wakeup call to government, regulators, and industry.’

Ms Boyd said energy retailers were required to offer support to Victorians struggling with energy bills, but that two recent reports had cast doubt on the quality of retailers’ support programs.

‘Our Problems with Payment report described the experiences of thirteen Victorians trying to stay on top of their energy bills and determined that the support offered by energy retailers was both insufficient and inconsistent. These findings were supported by the Financial and Consumer Rights Council’s Rank the Energy Retailer report, which prompted FCRC to call on the Government to “improve hardship practices and better support those in financial difficulty.”

‘We are optimistic that this new investigation will lead to Victorians no longer being disconnected from their energy just because they can’t afford energy supply.  We also hope it will result in retailers offering better support programs, and identifying at-risk customers early so they can offer assistance before their bills become unassailable.’

Ms Boyd said Consumer Action, which is undertaking its own research on ways to keep people connected to energy supply, is keen to assist the Essential Services Commission (ESC), which will run the investigation. ‘Our lawyers and financial counsellors speak to low-income Victorians struggling with energy bills on a daily basis so we have a unique insight on the issue.

‘The disconnections numbers and other statistics tell us something is wrong. But that’s only part of the story – nothing compares to the real-life stories of struggling Victorians. That’s what Consumer Action provides – energy research based on Victorians’ lived experiences.’

Ms Boyd warned that an investigation into disconnections was only part of the solution. ‘The Minister’s investigation is a great start and will be welcomed by consumer advocates across the board, but we also need to look at ways to help low-income Victorians reduce their bills.

‘Low-income households can’t afford energy efficient appliances or accommodation so their bills will often be high regardless of how vigilant they are. We need to look for new and innovative ways to help these households improve the energy efficiency of their homes and help them access energy efficient appliances,’ said Ms Boyd.  ‘A good start would be to turn the spotlight on the private rental market and look for ways to raise the energy performance of our homes, no matter where we live.’

END

Notes:

This year marks the tenth anniversary of Access to Energy and Water in Victoria, a Consumer Action report which called for an end to energy and water disconnection in Victoria.

The Victorian Government is considering doubling wrongful disconnection compensation to $500 a day. Given the increase in disconnection, Consumer Action urges the Government not to wait.