Australian Energy Regulator's (AER's) work on Better Bills for customers is likely to be helpful, but the real focus should be on its draft Consumer Vulnerability Strategy - which has real merits but probably still won't help protect remote SA communities from being forced onto repayment requirements.
SACOSS welcomes today's release of the Australian Energy Regulator’s Draft Consumer Vulnerability Strategy for consultation.
"We wholeheartedly support the AER’s vision to improve energy affordability and to ensure consumers in vulnerable circumstances are supported by their retailer to stay connected to an energy supply that is essential to life," said SACOSS CEO Ross Womersley.
"This is particularly important in South Australia, because we continue to experience the highest price per unit for electricity, and are amongst the least affordable jurisdictions for electricity in the National Electricity Market. The importance of ensuring these customers are able to access assistance early in the debt cycle so they avoid unmanageable long term debts is essential.
"Retailers have an obligation to support all customers to stay connected, and disconnection should only take place as a last resort after all supports have been offered and concessions applied.
"Our own State Government could learn some lessons from the national regulator in supporting our most vulnerable to maintain an electricity supply. The State Government has recently made regulations requiring all residents in remote Aboriginal communities to prepay for electricity when user pays is introduced in July next year.
"Prepayment customers however do not receive payment plans or hardship supports and the first outcome of payment difficulty is disconnection. Studies in the NT have shown that prepayment customers suffer through an average of 52 disconnections per year and that over 90 per cent of public housing tenants experienced a disconnection due to lack of credit.
The impacts of prepayment for energy were brought into focus in the last few weeks when residents required to quarantine in remote communities in the NT ran out of electricity in extreme heat.
"SACOSS is disappointed in the State Government’s move to mandate prepayment, and will be liaising with relevant stakeholders to try and minimise the potentially life threatening impacts of these changes," Mr Womersley stated.
What SACOSS is calling for, in relation to general energy bill woes
- SACOSS is urging all customers who are having trouble paying their bills to contact their retailer straight away, and reach out to Concessions SA to see if they are eligible for financial support to help pay bills.
- SACOSS is also calling on retailers to do better: in 2020/21 fewer customers in SA were receiving hardship supports or were on payment plans than pre-pandemic, despite burgeoning debt levels. And of the 3878 customers disconnected in SA during 2020/21, less than a third had been on a payment plan in the previous 12 months.
- SACOSS is calling for a universal system of mandatory household visits before any disconnection.
- SACOSS wants to ensure remote customers are offered post payment options, proper protections from being disconnected, and to ensure any life support customers are excluded from mandatory pre-payment arrangements.
Quick facts about low-income energy customers
- In SA, low-income customers pay (on average) 4.9% of their income on electricity, compared with between 2.5% and 3% in Victoria.
- SA hardship customers have the highest average debt in the nation of $2,438 ($714 above the national average).
- Only 40% of hardship customers in SA are receiving concessions (compared with 70% in Tasmania).
- Energy debt is increasing in SA: in 2020/21 the average electricity debt of customers not on a hardship program was $1,277 - a 13% increase in 12 months and nearly $300 higher than the national average.
Helpful Reference
Longden, T., Quilty, S., Riley, B. et al. Energy insecurity during temperature extremes in remote Australia. Nat Energy (2021). https://doi.org/10.1038/s41560-021-00942-2