EnergyAustralia alleged to have wrongly disconnected struggling customers

The Australian Energy Regulator (AER) has commenced Federal Court proceedings against EnergyAustralia Pty Ltd for the alleged wrongful disconnection of eight electricity customers experiencing financial distress.

The AER also alleges that EnergyAustralia failed to maintain and implement its hardship policy and did not offer or apply payment plans to the customers.

Retailers are required to provide protections to customers in financial difficulty under the National Energy Retail Law and Rules.

AER Chair Clare Savage said that robust enforcement ensuring compliance with the law is vital for building consumer trust that the energy market rules are working and that companies are doing the right thing.

“We’re alleging that EnergyAustralia knew these people were in financial hardship and disconnected them anyway. EnergyAustralia’s alleged failures made these customers’ situations worse by denying them access to the full range of protections to which they were entitled,” said Ms Savage.

Ms Savage urged people experiencing financial difficulty to contact their retailer to access the hardship protections to which they may be entitled.

“It can be tough to start a conversation about payment difficulties, and hard to know where to turn for help. If you expect to have trouble paying an upcoming bill, or your debt is mounting, call your retailer. It is their job to help you.

“As long as you are in a hardship program and meeting its conditions, you cannot legally be disconnected,” said Ms Savage.

The AER is seeking pecuniary penalties, declarations, orders requiring implementation of a compliance program and the appointment of a compliance officer, and costs. 

Notes to editors

The AER’s Customer Hardship Policy Guideline came into effect from April 2019. Last month retailers were required to implement new policies that provided stronger protections for vulnerable consumers.

Additional guidance for retailers is now available on the AER’s website. 

The AER alleges that between June 2016 and July 2018 for eight customer EnergyAustralia:

  • failed to maintain and implement its hardship policy as required by section 43(2)(c) of the Retail Law
  • failed to offer and apply payment plans to customers experiencing payment difficulties, in breach of section 50(1)(a) or (b) of the Retail Law.
  • failed to offer and apply payment plans that complied with the applicable requirements of the Retail Rules (in particular, payment plans that had regard to the customer’s capacity to pay), in breach of sections 50(1) and 50(2) of the Retail Law and rule 72(1) of the Retail Rules
  • disconnected customers premises not in accordance with the Retail Rules, in breach of rule 107(2) of the Retail Rules
  • failed to inform customers of its hardship policy, in breach of section 46 of the Retail Law and rule 71(1) of the Retail Rules.

About the AER

The AER works to make all Australian energy consumers better off, now and in the future. 

  • We regulate electricity networks and covered gas pipelines, in all jurisdictions except Western Australia. We set the amount of revenue that network businesses can recover from customers for using these networks.

  • We enforce the laws for the National Electricity Market and spot gas markets in southern and eastern Australia. We monitor and report on the conduct of energy businesses and the effectiveness of competition.
  • We protect the interests of household and small business consumers by enforcing the Retail Law. Our retail energy market functions cover New South Wales, South Australia, Tasmania, the ACT and Queensland. We drive effective competition where it is feasible and provide effective regulation where it is not. We equip consumers to participate effectively, including through our Energy Made Easy website, and protect those who are unable to safeguard their own interests. We use our expertise to inform debate about Australia’s energy future.
Issued date: 
21 November 2019
AER reference: 
NR 29/19
AER Media 0466 409 921