Origin Energy pays $40,000 in penalties for alleged wrongful disconnection and failure to provide hardship assistance

Origin Energy Electricity Limited (Origin) has paid penalties of $40 000 relating to its alleged failure to provide hardship assistance to a residential customer, and its alleged wrongful disconnection of the customer’s premises in New South Wales in 2015.

The penalties came about as a result of two infringement notices issued by the Australian Energy Regulator (AER).

AER Chair Paula Conboy said the AER was particularly concerned that even after the customer provided information to Origin about ongoing financial difficulties, and the same information was provided by a volunteer from a charitable organisation on the customer’s behalf, Origin failed to offer hardship assistance.

“Origin’s hardship policy states ‘If we’re on the phone with a customer who seems to be experiencing hardship, we’ll transfer them to our Power On (hardship) team right away’, but the customer was never transferred to Origin’s hardship team or registered on the hardship program,”

“It is not acceptable that a customer wanting, but struggling, to pay their bills is not given the assistance that is their right under the National Energy Retail Law,” Ms Conboy said. 

It is also alleged that Origin failed to follow the proper process before disconnecting the customer’s premises for non-payment of his energy bill in November 2015.

The National Energy Retail Rules require a retailer to follow a number of steps before they can disconnect a customer’s energy service for non-payment of a bill. In this case, Origin did not take into account the customer’s efforts to settle his debt, failed to offer the customer a payment plan arrangement, and failed to use its best endeavours to contact the customer before disconnection.

“Disconnection of a customer’s premises should be the last resort for retailers, especially for vulnerable customers. Protecting vulnerable customers is an ongoing priority for the AER and retailers who fail to adequately assist customers experiencing difficulties paying their energy bills, or disconnect vulnerable customers without following the proper process, may face enforcement action from the AER,” Ms Conboy said.

The payment of a penalty specified in an infringement notice is not an admission of a contravention of the Retail Law or Retail Rules. The AER can issue an infringement notice where it has reason to believe a business has contravened a civil penalty provision of the Retail Law or Retail Rules.

Background

The Retail Law and Retail Rules (which apply in New South Wales, the Australian Capital Territory, Tasmania, Queensland and South Australia) set out key protections and obligations for energy customers and the retail and distribution businesses they buy their energy from. The AER monitors and enforces compliance with the Retail Law and the Retail Rules.

Under the National Energy Retail Law, a retailer must maintain and implement a customer hardship policy for its residential customers. Hardship programs typically contain a range of support measures for customers experiencing payment difficulties, and retailers are prohibited from disconnecting a hardship customer for non-payment if they are adhering to a payment plan.

The Retail Law requires retailers to develop, maintain and implement a customer hardship policy for their residential customers. The purpose of the policy is to identify customers experiencing payment difficulties due to hardship and to assist those customers to better manage their energy bills on an ongoing basis. At minimum, a retailer’s hardship policy must include:

  • processes to identify customers experiencing payment difficulties due to hardship;
  • processes for early response by the retailer;
  • offering of flexible payment options (including payment plans and Centrepay);
  • processes to identify appropriate concessions and financial counselling services;
  • process to review customers’ market retail contracts; and
  • programs to assist customers in improving their energy efficiency.

The AER has a role in approving retailers’ customer hardship policies.

The Retail Rules specifically outline the steps a retailer must take before it can disconnect a customer’s premises for non-payment. Customers experiencing payment difficulties have a range of additional protections from disconnection, as under the Retail Rules if a customer is on a hardship program or is a residential customer adhering to a payment plan, they cannot be disconnected.

Disconnection of a customer’s premises for non-payment must be a last resort option for retailers. The AER encourages customers who are worried about paying their energy bill on time to contact their retailer as soon as possible to seek assistance.

In May 2015, the AER took enforcement action against another energy retailer, AGL, in relation to incidents in which nine hardship customers or customers on payment plans were wrongfully disconnected. AGL paid penalties of $40 000.

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.

Sector: 
Issued date: 
17 November 2017
AER reference: 
NR 35/17
Contact: 
AER Media 0466 409 921 media@aer.gov.au