AER Retail Market Performance and Affordability Report - Tasmania Highlights

The Australian Energy Regulator has published its 2nd annual report on retail market performance which provides a detailed picture of key issues in the Tasmanian retail energy market. The report also includes information on energy affordability.

The AER’s 2014 annual Performance and Affordability report includes information on the performance of retailers in a range of areas, including the number of customers in debt, debt levels, the number of disconnections, as well as information on the number of customers who are in retailer hardship programs. Information on retailers’ customer service levels, including complaint rates, is also provided.

The National Energy Retail Law commenced in Tasmania in July 2012.

AER Board member Jim Cox said the report sheds light on key energy issues facing many Tasmanian households:

  • approx. 6000 residential customers (2.6 per cent) in Tasmania had an electricity bill debt with their retailer,
  • the average debt was $704 ($100 less than last year),
  • approx. 3000 (1.3 per cent) of electricity customers were using payment plans with their retailer to repay debt, and
  • a further 1000 (0.43 per cent) received assistance under retailer hardship programs to repay their debt, representing an increase of more than 100 per cent.

“While there has been an increase in the number of disconnections and of customers on hardship plans, the introduction of a new energy retailer should increase competition levels in Tasmania,” Mr Cox said.

“Help under a retailer’s hardship program can include tailored payment plans based on what a customer can afford to pay. As long as a customer is making the agreed repayments, they shouldn’t be disconnected”

“If you experience financial difficulties, it is important to speak to your energy retailer early, to avoid the of risk disconnection.”

Retailer hardship programs are mandatory and have to be approved by the AER.

Despite the greater participation in hardship programs, the number of customers disconnected for non-payment increased to 1,555, a 47 per cent increase on the previous year.

Mr Cox said the increase in the numbers of people in hardship programs indicated that many consumers were taking steps to control their debt before it got out hand, which is a positive development.

“We take disconnection seriously and it should be a last resort for retailers when customers are unable to pay their energy bills. Retailers have to follow a number of steps before they disconnect a customer and we expect them to comply with these,” Mr Cox said.

“Our aim for this report is to highlight examples of good practice, as well as identifying areas of concerns.” Mr Cox said

“It is important that consumers are informed about the options that are available to them”.

The report also sheds light on the overall affordability of energy in Tasmania.

Tasmania had the least affordable annual electricity bills ($2518 or $2060 with an energy concession). These annual bills would account for 7.3 per cent of a low income household’s disposable income (or 8.9 per cent without a concession). However, due to a reduction in prices energy affordability improved in Tasmania in 2013-14.

“Tasmania’s relatively high electricity bills are primarily driven by a combination of high energy consumption due to the cooler climate, the absence of mains gas, as well as lower incomes,” Mr Cox said.

However, the average low income household (with no concession and on a standing offer) spent $2518 on electricity - a decrease of 3.5 per cent.

Fewer than 5 per cent of Tasmanian households are connected to gas and so they generally use more electricity than households in other jurisdictions.

Issued date: 
25 November 2014
AER reference: 
NR 24/14