Energy companies may face penalties of up to $20,000 for failing to offer assistance to customers in financial hardship.
Under proposed changes from the Essential Services Commission, energy retailers would have to:
- provide assistance that matches the type of payment difficulty a customer is having
- defer debt repayment for up to two years for customers experiencing serious payment difficulties and allow them to stay connected to their power supply on a pay-as-you-go arrangement
- work with customers to help reduce their energy use and access other support
Energy companies who fail to offer the necessary assistance to customers may be fined by the Essential Services Commission.
These recommendations arise out of the Essential Services Commission’s Inquiry into the hardship programs and policies of Victorian energy retailers, with the final report Supporting Customers, Avoiding Labels released today.
The Inquiry was initiated by the Andrews Labor Government in February 2015, following record disconnection rates under the former Coalition Government.
While some energy company hardship programs are better than others, the Inquiry found that overall they are not preventing customers from building up large debts or being disconnected, customers are not getting the targeted assistance they need and many of the current rules cannot be enforced.
As a result many Victorians are falling deeper into debt with little hope of avoiding disconnection or repaying their debt.
The Labor Government welcomes the report and will now work closely with the Essential Services Commission as it consults on the proposed changes. It is expected the new framework will come into effect on 1 July 2017.
Following the commencement of the framework, an expert panel will monitor and report on the new arrangements to ensure they are delivering on the recommendations of the report.
Quotes attributable to Minister for Energy and Resources Lily D’Ambrosio
“The proposed approach will provide a safety net for customers who are struggling to pay their energy bills and will make it easier for them to work with retailers to stay connected.”
“Disconnections hit a record high under the Coalition Government, which is why we launched this inquiry. It is time to put consumers front and centre of our retail energy policy.”
Reviewed 19 August 2020