Australian Energy Regulator alters report to remove warning about power bill debts rising ‘even more than anticipated’

In an extraordinary move, the energy regulator has changed a major report to remove a warning that household electricity and gas bill debts are escalating even more than it anticipated.

A warning that household electricity and gas bill debt levels are increasing even faster than what was expected has been airbrushed from a major new report by the Australian Energy Regulator.

The AER’s 310-page State of the Energy Market 2024 report, published on Thursday morning, originally said “debt levels and other indicators of financial difficulties are expected to escalate from late 2024 to early 2025, even more than anticipated.”

This was not mentioned in the official media release, which instead highlighted easing wholesale electricity prices and growth in rooftop solar.

After looking at the report, this masthead immediately sought details of what the AER had been anticipating for debt levels and what was now expected, as well as whether the reference to debt levels related to the number of people in arrears or the average amount owed — or both — along with more information on the unspecified other indicators of financial difficulties.

The section of the AER State of the Energy Markets 2024 report before it was altered. Picture: aer.gov.au

Five hours later, the AER flagged that the debt statement had been made in error and that it did not have data to support it. The report would be altered to remove the forward-looking remark, it advised.

At about 8.30pm, the passage was removed from the report.

The same section of the AER’s State of the Energy Market report after it was altered. Picture: aer.gov.au

The AER also separately published a list of errors and corrections. One of the errors, it said, was the inclusion of sentences that said “affordability will likely be an ongoing challenge for the foreseeable future. Debt levels and other indicators of financial difficulties are expected to escalate from late 2024 to early 2025, even more than anticipated.”

The other error was having said “the AER expects to see billing complaints continue to increase as retail energy prices continue to rise.”

That sentence was also taken out of the report.

At a Senate Estimates hearing earlier this week, AER chair Clare Savage indicated the percentage of households in retailer hardship programs at the end of June was 1.9 per cent versus 1.4 per cent a year earlier. The size of a separate group of customers, being those with 90-day debt, was “constant” over the 12 months at 2.9 per cent, she said.

Australian Energy Regulator chair Clare Savage. Picture: NewsWire’s Diego Fedele

During the hearing Ms Savage was not asked about changes in the typical amount of debt.

The AER has previously reported that in the 12 months through March, average debts in NSW and South Australia both jumped by $152 or more than 10 per cent. In Queensland, the increase was about five per cent, or $37.

Victoria is separately regulated by the state’s Essential Services Commission, which reports debt data differently. ESC figures show in 2023-24 there was a 20 per cent rise in the number of customers owing at least $300.

Elsewhere in the State of the Energy Market report, the AER noted there had been an increase in annual bills throughout its jurisdiction last financial year. In some places, average costs surged by as much as 20 per cent or $500 a year before taxpayer-funded rebates. Gas bills also rose everywhere except Queensland, “where there was a marginal reduction.”

The AER also observed that high costs had serious consequences for the physical and mental wellbeing of low-income households in particular.

It cited recent Australian research found for every one per cent increase in electricity prices, people “near poverty” reduced their food spending by 0.2 per cent, along with cutting their energy consumption. The AER said “network costs are likely to maintain upward pressure on electricity prices,” driven by higher interest rates, new transmission lines and replacing existing assets such as old power poles.

Energy Minister Chris Bowen says the government knows people are doing it tough. Picture: NewsWire’s Martin Ollman

Accelerating the rollout of smart meters to all households by 2030, as has been recommended, “could also result in higher retail costs,” the AER forecast.

As well, wholesale energy prices are “expected to remain elevated compared with historical levels,” the AER said.

“The transition in the energy market” from mainly fossil-fuel-fired generation to renewables “has increased the risk of reliability gaps,” the AER said.

“Coal plant closures remove a source of firm capacity that could historically be relied on to operate when needed.

“As contribution from weather-dependent generation increases, the power system must respond to increasingly large and sudden changes in output caused by changes in weather conditions and dispatch decisions by plant operators,” the regulator said.

The AER flagged “increased risks of reliability gaps if there are delays in planned transmission network infrastructure or delays in dispatchable generation such as batteries.”

Federal Energy Minister Chris Bowen said “we know Aussie households and small businesses are doing it tough, our Government is providing energy bill relief now while working to deliver an overdue reliable, modern energy grid that won’t be exposed to international price spikes.”

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