Hardship protections a right not a privilege: AER

A new Customer Hardship Policy Guideline released by the Australian Energy Regulator (AER) today will bring greater clarity and consistency to the support retailers are required to provide to their customers and new penalties will apply where retailers fail to meet their obligations.

“More Australian households are experiencing difficulty paying their bills. We are seeing rising levels of energy debt and more people being disconnected. This is of grave concern.  

“Retailers need to better assist vulnerable customers experiencing payment difficulties. Protection for people having trouble paying their energy bills is a right, not a privilege,” AER Chair Paula Conboy said.

The Guideline requires retailers ensure hardship programs are easily accessible to customers, and that standard statements explaining how they will help customers are included in their policies. The Guideline also places an onus on retailers to better identify consumers who may need help.

Retailers will have two months to implement the Guideline by updating their current hardship policies and providing them to the AER for approval. The AER will take enforcement action on retailers if these policies do not meet the Guideline’s requirements.

“We know that more people are going into hardship programs, but fewer people are successfully completing them. This is why the AER has worked to strengthen the protections available to energy customers.

The AER’s most recent report on the retail energy market (2017-18) shows that over 82,000 energy customers are in hardship programs and only 22 per cent of electricity and 17 per cent of gas customers successfully complete the program.

There were 72,100 residential electricity disconnections (11,794 gas) in the year, a rise of 11 per cent on the previous year for both sectors while the average electricity consumer’s debt on entry to a hardship program was $1146 ($734 gas).

Identifying customers who may be at risk of falling behind in their payments is a key element of the Guideline and one of the best mechanisms to help vulnerable customers better manage their bills and avoid disconnection.

“The Guideline obliges retailers to not only work harder to quickly identify consumers struggling with their bills, but also to meaningfully engage them to help manage their bills on an ongoing basis.

“The Guideline also empowers customers to know their rights, and to take early action if they can. We recognise this is not always possible when people are experiencing hardship and vulnerability.

“It can be a difficult conversation to start, and hard to know where to turn for help. If you know you’re going to have trouble paying an upcoming bill, or your debt is mounting, call your retailer and ask them to help you. As long as you are in a hardship program and meeting its conditions, you cannot legally be disconnected,” Ms. Conboy said.

The AER initiated a rule change proposal in November 2018, asking the Australian Energy Market Commission to make a new rule to empower the AER to develop this Guideline and strengthen protections for customers.

About the AER

The Australian Energy Regulator (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 do not set the prices consumers pay.

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: 
29 March 2019
AER reference: 
NR 07/19