Victoria’s energy laws help consumers manage energy costs – but retailers can do more
31 May 2022
The Essential Services Commission has published the findings of its review into how Victorian energy retailers are implementing the payment difficulty framework.
Commission chair Kate Symons said the review shows the value of the framework in supporting Victorians experiencing bill stress, including during unpredictable, high impact events such as the pandemic, but energy retailers could do more.
“The payment difficulty framework requires retailers to assist Victorians struggling to pay their energy bills. This includes helping consumers stay on top of bills by adjusting payment amounts and frequency, offering payment plans to manage missed bills or ongoing energy usage, and providing advice on how to manage energy usage or apply for utility relief grants and concessions,” said Commissioner Symons.
“There are some positive findings from the review. Since the framework came into effect in 2019, more customers have received tailored assistance compared to past retailer hardship programs. More customers are receiving more appropriate assistance, and there have been fewer disconnections for non-payment. But of those customers that were disconnected, over half had not received assistance. More work needs to be done by retailers to engage with these customers to break this debt-disconnect cycle.”
The review shows that retailers have been implementing the framework to meet its objectives, but customer outcomes vary significantly between and within retailers, often influenced by the level, frequency and quality of retailer-customer engagement.
“How and when energy retailers engage with customers facing bill stress makes a big difference to a customer’s ability to manage their bills. Some customers requiring support with their energy bills may be experiencing multiple barriers to accessing and receiving assistance. Some may have higher arrears, despite receiving assistance to avoid getting in arrears. It was clear in the study that customers who can pay for their ongoing energy use benefit from the framework the most,” said Commissioner Symons.
In the last two years, two energy retailers have paid penalties of more than $1.5 million combined for alleged non-compliance with the energy payment difficulty framework.
Commission Symons said that under new legislation, the commission has increased powers to investigate and enforce energy retailer compliance with the framework to protect consumers.
“The purpose of this review was to explore how retailers were implementing the framework to meet its objectives. The findings highlight clear opportunities for retailers to increase investment in their people, procedures, platforms and overall compliance with the framework to further improve customer outcomes,” said Commission Symons.
“And our message to Victorian households or businesses struggling to pay their bills is please don’t delay – contact your energy retailer as soon as possible for assistance and to find out what concessions, rebates and payment plans are available to you.”
The review covered analysis of stakeholder feedback, retailer data, consumer insights research, and call recordings between retailers and customers receiving payment assistance. The full report and findings are available online. See below for key findings, stats and graphs.
Our key findings
1. Implementation of the framework is broadly meeting its objectives
More customers are receiving more appropriate assistance.
There have been fewer disconnections for non-payment, but more than half of these customers had not received assistance beforehand.
Energy customers’ awareness and knowledge of their entitlements continues to vary.
2. Customer outcomes vary significantly between and within retailers
Average customer arrears vary by retailer, despite assistance aiming to help customers avoid getting into arrears.
Retailers’ use of discretion in delivering payment plans varies.
Concessions and utility relief grants can be more effectively provided to customers as part of payment assistance.
Lowering energy costs and usage is also key to supporting customers.
3. The level and quality of retailer-customer engagement affects customer outcomes
The appropriateness and timing of retailer communication with customers varies.
Early intervention with customers improves outcomes.
Some retailers are more successful in engaging with customers before they build up large arrears.
Some customers requiring support with their energy bills may be experiencing multiple barriers.
4. Customers who can pay for their ongoing energy use benefit most
Victoria’s energy payment difficulty framework: At a glance
Positive and improved customer outcomes
Negative customer outcomes
*Defined as hardship customers in the data
**Between January 2019 and June 2020, which captures the disconnections that occurred in the period prior to the pandemic.