Energy businesses receive mixed report card in customer service standards during 2013-14
18 December 2014
Victorian energy businesses recorded sharp increases in the rate of residential disconnections and customer complaints in 2013-14, but showed improvements in customer access to hardship programs, call centre responses to complaints and call response times, according to the
Energy Retailers Comparative Performance Report – Customer Service 2013-14, released today by Victoria’s energy regulator, the Essential Services Commission.
The Report provides an annual overview of how electricity and gas retailers are meeting consumer needs in Victoria. In particular, it focusses on three key areas of customer service: hardship, complaints and disconnections.
In 2013-14, the number of energy customers participating in retailers’ hardship¹ programs increased by 38 per cent from 2012-13, from 24,356 to 33,673, and fewer customers were denied access to a retailer’s hardship program. Denials fell from 801 in 2012-13 to 750 in 2013-14.
According to the Commission Chair, Dr Ron Ben-David, “Increased participation in hardship programs may be a positive development if it is indicating that retailers are working more closely with customers who may be experiencing difficulty in paying their bills.”
However, the Commission’s report also expresses concern that although the average debt on entry into hardship programs increased in the last year, from $742 to $1,034, the average time spent in such programs declined from 382 to 265 days.
The Report also focussed on customer complaint measures. Retailers received 251,121 complaints from electricity customers in in 2013-14. This represents an increase of 41 per cent on the previous year and follows a 42 per cent increase in 2012-13. Similarly, gas complaints also increased by 41 per cent (to 84,776), following a 113 per cent increase in the previous year.
Despite the significant increase in electricity and gas complaints to retailers over the last year, the Energy and Water Ombudsman (Victoria) reported a 2 per cent decrease in total complaints investigated. A total of 9,294 investigations were conducted during during 2013-14.
According to Dr Ben-David, “While the level of complaints recorded has increased rapidly, it seems energy retailers are making greater efforts to resolve complaints directly with their customers, with fewer disputes requiring resolution by the Ombudsman”.
There are further signs that energy retailers are investing in managing customer complaints, and are doing so in a more timely manner. The energy industry’s call centre performance showed significant improvement during the year, with 69 per cent of calls answered within 30 seconds – an increase from 63 per cent in 2012-13. At the same time, there was a six per cent decrease in the total number of calls to retailers, possibly suggesting fewer repeat calls.
Disconnection rates for residential electricity and gas consumers also increased during the year. Over 34,000 electricity customers were disconnected from their power supply as a result of unpaid bills, a 36 per cent increase on 2012-13. This represents 1.47 disconnections per 100 customers compared to a 1.07 disconnections per 100 customers last year. Similarly, 24,178 gas customers were disconnected during 2013-14, a rate of 1.33 disconnections per 100 customers.
Among individual energy retailers, only AGL and Red Energy reduced the rate at which they disconnected customers. Alinta Energy, Click Energy, Lumo Energy, Neighbourhood Energy, Origin Energy and Simply Energy all increased their disconnection rates by at least double.
While disconnection rates have generally increased across Australia, Victoria’s disconnection rate is now the highest in Australia.
“Comparing energy prices and disconnection rates across the different States, it is not at all clear why our disconnection rates are so much higher than elsewhere,” Dr Ben-David said.
According to the Performance Report, during 2013-14 the proportion of disconnected customers who had previously been on an instalment payment plan decreased, as did the proportion of disconnected customers who had multiple disconnections over 24 months. The number of disconnected concession card holders remained less than 30 per cent of all disconnected customers.
Dr Ben-David indicated that many of the findings in the Report will be investigated as part of the Commission’s current Review of Energy Customer Disconnections. This Review will investigate the nature and level of customer disconnections in Victoria, whether the rise is linked to energy retailers’ processes and procedures, and whether changes are required in the regulatory framework that outlines retailers’ obligations to customers.
The Commission will be consulting widely and publicly to ensure that all views are represented. A final report will be issued in the second half of 2015.