Energy retail disconnections and participation in Hardship Programs both up in 2012-13
18 October 2013
The rate of residential electricity disconnections increased by 6 per cent during 2012- 13 on top of a 33 per cent increase observed in each of the preceding two years,
according to a report released today by Victoria’s energy regulator, the Essential Services Commission.
The Energy Retailers Comparative Performance Report – Customer Service 2012-13 outlines the level of customer service provided by retailers to Victorian electricity and gas consumers in 2012-13.
According to the Commission’s chairperson, Dr Ron Ben-David, “The rate of disconnections may have been higher had EnergyAustralia not suspended disconnecting customers for most of the year while it sought to implement its new billing system”.
The report found that gas disconnections decreased in 2012-13, against an upward trend in recent years, but that the rate is still high compared with historical results. Corresponding with the increase in electricity disconnections, overall participation in retailers’ hardship programs increased by 29 per cent in 2012-13, from 18,879 customers (or 0.46 per cent) to 24,311 customers (0.57 per cent).
“Despite this seemingly significant improvement on last year’s participation in hardship programs, its overall effect is to reverse the decline in participation numbers observed in the previous two years”, Dr Ben-David said.
The report found that while the hardship program participation rate in 2012-13 is approximately the same as it was in 2008-09, the rate of disconnections rose by at least 150 per cent during the same period.
“We are encouraged by the improved participation rate because it suggests retailers are more actively identifying customers who may be experiencing payment difficulties and are assisting them to access hardship programs,” Dr Ben-David said.
“Nevertheless, we remain of the view that retailers can still improve their performance in supporting customers who may be encountering difficulties in paying their energy bills.”
Complaints reported by both electricity and gas retailers rose during 2012-13, notably to 5.5 per 100 customers for electricity and 2.4 per 100 customers for gas (up from 4.6 and 1.5 per 100 customers, respectively, in 2011-12). The majority of electricity and gas complaints (61 per cent) relate to billing.
Although the complaints reported by retailers increased in 2012-13, many retailers reported that they have increased their focus on customer service, with greater emphasis on efforts to resolve complaints directly with customers, rather than through the Energy and Water Ombusman EWOV (Victoria). This may be evidenced by a decline of 8 per cent in the number of complaints referred for full investigation by EWOV.
“The findings presented in this report may be suggesting an emerging confluence of two trends,” Dr Ben-David said, “involving energy retailers paying more attention to credit management at the same as time as an increasing number of customers are experiencing payment difficulties . This could be leading to the higher rates of disconnection we have observed.”
“In the year ahead, we will be working closely with retailers, financial counsellors and consumer welfare organisations to identify, develop and implement best practice methods to support customers who may be experiencing difficulties in meeting their energy bills,” he said