Energy disconnections hit an 18-year high in Victoria

8 April 2015 | Regulator launches a review of retailer hardship arrangements.

Are retailers too quick to cut out the lights?

Consumers have a number of rights when it comes to avoiding disconnection of their electricity or gas services, including the offer of a reasonable payment plan and special consideration for hardship cases. And if you're wrongfully disconnected, you're generally entitled to compensation.

But such protections haven't prevented the number of disconnections from hitting an 18-year high in Victoria.

The rise in power cut-offs has led the Essential Services Commission – which regulates the sale and supply of energy in Victoria – to take a closer look.

According to the Commission, the Victorian regulatory framework has been set up to "make disconnection a last resort".

Retailer self-reporting

Currently, the Essential Services Commission reviews retailers' hardship policies and disconnection records by way of annual reports supplied by the retailers.

But it acknowledges that "without context about each customer's circumstances, it is difficult to determine how effectively retailers assist customers in financial hardship".

To get a better sense of what's going on in the real world, the Commission says it will review submissions to its initial inquiry paper (the first of three), hold workshops and request information and data from retailers, meet with consumer advocacy groups and conduct other roundtable discussions.

Best practice energy hardship arrangements

As it conducts its inquiry over the next few months, the Essential Services Commission will work from a blueprint of what it considers best practice in handling disconnections.

Some of the key best-practice elements so far are:

  • Early identificationRetailers should take steps to pre-identify customers who will likely be unable to pay their energy bills and help them avoid accumulating debt and experiencing disconnection.
  • Useful information – Customers should be provided with guidance on assistance that is easily accessible, clear and understandable.
  • Staff training – Staff should be continually trained to treat customers with respect and dignity.
  • Partnerships – Retailers should cultivate partnerships with customer welfare groups, financial counselling agencies, legal aid and dispute resolution bodies to increase access to assistance available to customers.
  • Sensitive and flexible approach – Retailers should tailor interactions to each situation so customers receive the best assistance suited to their situation.

The Essential Service Commission is expected to deliver its findings on the rise in disconnections by August this year. Consumers can comment on the initial paper until 1 May 2015.

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