Additional protections to support households and small businesses struggling with energy bills will be extended for a limited time to enable retailers and customers to work together to tackle energy debts.
Australian Energy Regulator Chair Clare Savage said the regulator expects retailers to continue making contact with those customers with energy debt who need support and to transition them onto sustainable payment plans or hardship arrangements.
“We’re very conscious that the winding back of temporary income support measures may make things more difficult for some customers. So, in the coming months, residential customers will continue to be protected from disconnection and referral to debt collection agencies provided they are in contact with their retailer about their debt,” Ms Savage said.
“These additional protections can’t last forever though and it is likely they will end on 30 June 2021. So we would like to see as many people as possible take the opportunity to transition onto sustainable payment plans or hardship programs before 30 June 2021.
“Our focus remains on encouraging both retailers and customers to reach out to each other and agree a sustainable payment plan based on an individual customers’ capacity to pay and for retailers to provide additional hardship support where appropriate.
“We want to see retailers taking proactive action to assist their customers so it’s critical that customers don’t ignore the calls, emails, texts and letters from their retailers.
“Now is the time for customers to agree an affordable plan with their retailer and to start chipping away at their debt, even if it’s just a few dollars a week.
“While we saw debt for residential energy customers increase in 2020, this year debt levels have stabilised so it's time to start bringing down energy debt and continue working towards a return to normal.
“We will continue to monitor the impact of COVID-19 on households and small businesses over coming months, as well as retailers’ compliance with the important consumer protections provided under the energy laws.
“While we have been very pleased with the way the energy sector has supported customers through the pandemic to date, we will not be afraid to take enforcement action if necessary.”
| Performance indicator | Residential | Small business |
|---|---|---|
| Number of electricity customers in debt1 at 1 March 2021 / % increase since 30 March 2020 | 130,000 customers / 10% | 16,100 customers / 22% |
| Total electricity debt at 1 March 2021 / % increase since 30 March 2020 | $149 million / 32% | $43 million / 21% |
| Average amount of electricity debt $ at 1 March 2021 / % increase since 30 March 2020 | $1151 / 19% | $2660 / -1% |
| Number of customers on payment plans (electricity and gas) at 1 March 2021 / % increase since 30 March 2020 | 107,500 customers / -5% | Payment plan data only collected for residential customers under AER guidelines. |
[1] Debt represents electricity 90-day debt, which is debt that has been outstanding for 90 days or more. 90-day debt data is our most robust measure of voluntarily provided outstanding customer debt. This data is based on our COVID-19 retailer voluntary data and is not as robust as the data we collect on a quarterly basis through our mandatory Performance Reporting Guideline process. Data in the table has been rounded.
For more information go to the COVID-19 Retail Market Data Dashboard.
Note to editors
The AER introduced the Statement of Expectations at the start of the pandemic in March 2020. This is the fourth update.
The Statement applies to households and small businesses in Queensland, New South Wales, Australian Capital Territory, South Australia and Tasmania. AER data also covers these jurisdictions.
Through the Statement, retailers are expected to:
- Offer payment plans or hardship arrangements to customers experiencing financial stress, which may include a period in which no payment is made.
- Make payment plans and hardship arrangements sustainable by taking into account a customers’ capacity to pay and ensuring they are on the tariff most likely to minimise their ongoing energy costs.
- Not disconnect residential customers in financial stress who are in contact with the retailer about their debt or accessing retailer support, and small business customers who are adhering to a payment plan.
- Process an order for reconnection immediately on contact from a disconnected customer and waive disconnection, reconnection and contract break fees.
- Defer referrals to debt collection agencies of residential customers in financial stress and who are in contact with their retailer about their debt or accessing retailer support. Small businesses that are adhering to a payment plan should also not be referred to debt collection agencies for recovery actions or credit default listing.
Retailers are also expected to consider actions like lower cost plans to minimise their customers’ ongoing energy costs along with the volume of any outstanding debt.
Under the National Energy Retail Law, energy retailers must have a customer hardship policy to identify customers experiencing payment difficulties due to hardship and to assist those customers to better manage their energy bills on an ongoing basis.
About the AER
The Australian Energy Regulator (AER) works to make all Australian energy consumers better off, now and in the future.
Read more about the AER.