Disconnection disaster: AER called in to review energy hardship policies

By Ceyda Erem ·

A growing number of electricity disconnections across eastern states has prompted the Australian Energy Regulator (AER) to conduct a review of hardship policies.

The purpose of hardship policies is to identify and provide assistance to energy customers experiencing payment difficulties, with the hope of helping Aussies better manage their electricity bill.

Total electricity disconnections have increased from 63,843 to 64,926 over the last financial year across all states, excluding Victoria.

AER chairman, Paula Conboy explained that this number is “troubling”, and the extreme measure of disconnecting households needs to be put up for debate for its fairness.

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"The increase in the number of electricity customers being disconnected is troubling: disconnecting a customer is a serious measure and we consider that this step should only be taken as a last resort," she said.

While all states experienced an increase in disconnections, particularly low-income households, Queensland saw the largest number of disconnected households as a result of non-payment.

Earlier this week, Essential Services Commission chair, Ron Ben-David revealed that many Aussies are struggling to meet discount conditions, like paying on time, and are entering hardship programs already with existing debt to clear.

“The average debt for someone entering a hardship program for 2016-17 was $1,241, meaning these customers are already a year behind before they start getting help,” he said.

According to a recent AER report, electricity costs currently make up 5.8% of a low-income household’s disposable income and with only one in four customers successfully exiting the retailer hardship program, current aid may not be enough.

“We are reviewing retailer hardship policies. Hardship policies need to provide real assistance to more consumers. We will use all the tools available to us to ensure retailers are meeting their obligations to customers in this very important area,” Conboy explained.

With the rising number of Aussie households left without power and the predicted 2018 price hike for EnergyAustralia customers, now may be the time to switch energy providers before the country enters its hottest summer yet, especially since Mozo data found that there's room for up to $929 in annual savings to be made across the country.

“Don’t resign yourself to shocking bill prices. Our research shows that many households can actually offset their bill increase and still have savings to bank by switching to a cheaper energy plan,” said Mozo Director, Kirsty Lamont.

If you’re ready to get ahead and make the switch before summer, our Energy Cost Crunch calculator provides instant quotes from providers in your area to get you one step closer to a better deal.

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Ceyda Erem
Ceyda Erem
Money writer

Ceyda Erem is Mozo’s authority on Energy, as well as having broader expertise as a personal finance writer. She loves to put her researching and writing talents into stories that help our readers to make more informed financial choices, whether that’s about finding the best energy deal or writing about the latest sneaky bank tricks. Ceyda has a Bachelor of Arts (major in writing) from Macquarie University.