AER final decision on the minimum disconnection amount

Following an extensive consultation process, the AER has decided to retain the minimum disconnection amount of $300 (GST inclusive). We have set out our reasoning in our Final Decision paper.

The minimum disconnection amount prevents retailers from disconnecting a customer's electricity and/or gas supply if the amount owed by the customer is below the minimum amount and the customer has agreed to repay that amount - retailers cannot simply disconnect customers for owing $300.

Disconnection can have severe impacts on customers' financial, emotional and general well-being. Disconnection is a last resort and we strongly encourage early and effective engagement by customers and retailers where customers appear at risk of disconnection for non-payment of their bill.

The minimum disconnection amount is just one of a suite of protections for customers experiencing difficulties paying their bills. Those protections include the requirement for retailers to offer payment plans or hardship assistance and retailers must offer assistance to all customers having difficulty paying their bills, irrespective of the minimum disconnection amount. If customers are adhering to a payment plan or participating in a retailer's hardship program, retailers are prohibited from disconnecting them, regardless of the amount owed.

Early engagement can see customers benefit not only from the full suite of protections afforded by the National Energy Retail Law but also in receiving early and targeted help, external concessions, rebates and discounts. Initiatives like the AER Sustainable Payment Plans Framework provide further support to customers by encouraging retailers to improve the quality of conversations with their customers about payment plans, while still allowing flexibility and incentives for retailers to manage customer debt early and well. We consider retention of the $300 minimum disconnection amount is consistent with an early engagement approach.

The AER plans to conduct a further review of the minimum disconnection amount in three years but will initiate a review earlier should developments in the market warrant that. The AER will also continue to monitor retailers' compliance with the various hardship and disconnection obligations in the law to ensure customers are properly protected.

Segment: 
Issued date: 
30 March 2017
AER reference: 
AC 30/17