Number of households struggling to pay electricity bills jumped 18pc between 2022 and 2023, ACCC finds

The number of people struggling to pay electricity bills jumped 18 per cent between 2022 and 2023, the competition regulator found, underscoring the cost-of living crisis that has sapped support for the government.

Energy Minister Chris Bowen. Picture: NewsWire / Martin Ollman

The number of people struggling to pay electricity bills jumped 18 per cent between 2022 and 2023, the competition regulator found, underscoring the cost-of living crisis that has sapped support for the government.

The Australian Consumer & Competition Commission said that as of September 30, 2023, 273,337 households were struggling to pay their electricity and either receiving concessions, on payment plans or both.

This was a rise of 43,000 from the same period one year earlier, the ACCC said.

The results illustrate the toll of the surge in electricity bills, triggered by a global energy crunch, and the continued rise in those struggling to pay shows many are falling behind, despite the government’s billions of dollars in concessions.

The ACCC said the increase in those on payment plans came despite falling wholesale electricity prices – the cost of generating electricity – which in 2023 had yet to work through to household bills. Bills are typically determined by the cost of producing electricity in the period preceding the annual tariff reset being implemented on July 1.

Electricity bills are set to fall to reflect the decline in wholesale electricity prices in 2023, the ACCC said, and the federal government will hope this will allow households to catch up on outstanding bills.

Federal Energy Minister Chris Bowen said the report demonstrated why the government increased fiscal support. “We know that many people are under pressure – that’s why we’ve delivered further energy rebates to provide more cost-of-living help to more Australians,” he said.

“On 1 July – we’re taking $300 off your power bills. In two decades, Peter Dutton is promising to serve up the most expensive form of energy there is.”

Economists say the relief included in a spate of spending unveiled by Labor in its May budget will potentially stimulate the economy, igniting inflation and forcing the Reserve Bank to again lift interest rates.

Any such increase would be a hammer blow to many households that have already reduced their expenditure and have little more room to cut.

With concern about vulnerable customers, energy companies are increasingly under the microscope. Australian law requires retailers to offer payment plans to those unable to pay, and there are strict rules around disconnections.

The Australian Energy Regulator and its Victorian equivalent have moved several enforcement actions against anyone who contravenes these rules, and Clare Savage, chair of the AER, the country’s main watchdog, said there would be no let-up this year.

“For these reasons we have extended our 2023-24 Compliance and Enforcement Priorities for 12 months and updated them to address important fields, including the efficacy of retailer hardship policies, price and tariff change notifications, and network compliance with performance standards,” she said.

Mindful of the law and potential for alienating customers, energy retailers have vowed to set aside substantial sums to aid vulnerable customers, but carrying debt that does not carry interest has taken a toll on the industry.

The cost of carrying the debt is eventually considered by the AER when it sets the default market offer.

Designed to the maximum that a household can be charged over a year, it considers the wholesale cost of electricity, the toll of transporting electricity and the cost of compliance with rules and regulations.

Originally published as Number of households struggling to pay electricity bills jumped 18pc between 2022 and 2023, ACCC finds