Essential Service Commission unveils new rules to avoid energy disconnections

VICTORIANS struggling with power bills will have to be offered easier payment options under new minimum standards of help for consumers in difficulty.

New minimum standards for energy bill assistance have been set. Picture: Steve Tanner

VICTORIANS struggling with power bills will have to be offered easier payment options.

The Essential Services Commission, unveiling new minimum standards of help for consumers in difficulty, says retailers will have to offer them at least three of four choices: shorter billing cycles; postponement; advance payments; or fixed bill “smoothing”.

Consumers will be able to nominate “fair and reasonable” debt repayment plans they can afford, and disconnections for unpaid bills of less than $300 will be banned.

ESC chairman Dr Ron Ben-David said of the “once in a generation” reforms: “The bottom line is they (retailers) are going to have to change their culture and their attitude.”

New minimum standards for energy bill assistance have been set. Picture: Steve Tanner

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From next July 1, the debt threshold for disconnection will lift from $120 to $300. But a series of other safeguards won’t have to be in place until the following January 1.

The net cost of the new framework, totalling up to $29 per household over a decade, is likely to be passed on to consumers. Retailers will have to:

ALLOW requests for “flexible” payment options, and debt repayment plan suggestions. Disputes will be handled by the energy ombudsman.

PUT those in the direst situations on a cheaper tariff.

SCRAP “intrusive” capacity-to-pay hardship assessments.

ADVISE on reducing energy use and costs.

ALLOW debt repayments monthly for up to two years, and in severe cases put them on hold for at least six months.

The State Government ordered an inquiry into alarming power disconnection levels almost three years ago.

The Herald Sun recently revealed more than 1000 households a week are still being cut off. Some families have debts as high as $18,000.

Australian Energy Council general manager Sarah McNamara welcomed the move, and Victorian Council of Social Service CEO Emma King predicted there would be “fewer people racking up monster debts or living in the dark”.

The latest data shows almost 37,000 consumers in hardship programs in the three months to June owed $60 million.

Retailers who wrongfully disconnect consumers must pay compensation of $500 per day, and risk a $5000 penalty.

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@KarenCollierHS