The Australian Energy Market Commission (AEMC) has introduced a rule changed aimed at better protecting customers facing financial hardship, which has received positive feedback from the Energy and Water Ombudsman NSW (EWON).
The new rule requires the Australian Energy Regulator (AER) to develop Hardship Guidelines that contain consistent and specific statements that retailers must include in their hardship policies. The new Guidelines will be released on 1 April 2019.
EWON has welcomed the rule change, commenting that existing hardship programs fall short of what is required to address energy affordability in today’s market.
Energy and Water Ombudsman NSW, Janine Young, said, “Customers are not receiving consistent, reliable support from energy retailers, despite all retailers being required to have hardship programs in place.”
According to EWON, the cost of energy over the past ten years has increased well beyond Consumer Price Index and wage growth, and payment difficulties, debt and disconnection of supply are now the norm for many consumers.
In 2017/2018 complaints to EWON relating to energy affordability increased by 12 per cent and were present in 21 per cent of all complaints. According to the AER, 37,565 households had their electricity or gas disconnected last financial year, up 14 per cent on 2016/17.
In EWON’s submissions to the AEMC and the AER in relation to the Guidelines, EWON identified the following issues, supported by case studies regarding current market practice:
- Failure of retailers to identify customers experiencing financial hardship
- Inconsistency in determining eligibility and or referral to Affordability / Hardship Programs
- Frontline staff not implementing existing affordability / hardship policies
- Retailers seeing disconnection as an end of their responsibilities
“To truly address affordability, the new Guidelines need to be accessible to all customers and take individual circumstances into account regardless of the retailer. Most importantly, they must be accompanied by behavioural and process change by energy retailers that ensures frontline staff know when to refer customers for affordability support,” Ms Young said.
“The energy retailers who are signatories of the Energy Charter have committed to this cultural change. I look forward to seeing that enacted.”
Retailers will have two months after the Guidelines are introduced on 1 April to submit their updated policies to the AER for approval.
To view EWON’s submissions, visit ewon.com.au.
Lauren Butler is the assistant editor for Utility Magazine. She’s based in Melbourne, Australia.