Power bills crippling Victorian families, almost 40,000 households struggling to pay

POWER bills are crippling Victorian families, with almost 40,000 households now in hardship programs. struggling to pay their bills.

Hardship scheme participants, for those struggling to pay their bills, have increased by 17 percent in a year.

POWER bills are crippling Victorian families, with almost 40,000 households now in hardship programs.

The average debt for those struggling to pay bills was $1600.

Overall, Victorians battling with electricity and gas costs owe $63.8 million.

The staggering debt — just for customers enrolled in retailer hardship programs — has been revealed by the state’s energy watchdog.

Total energy debt is even higher, as the reported amount does not include others in difficulty.

Combined electricity and gas bills have surged 88 per cent in Victoria over the past decade, with households now paying $3270 a year on average, according to Australian National University modelling.

Latest figures show almost 90,000 electricity customers and almost 70,000 gas customers on average each month were on payment plans, up 12 per cent and 16 per cent annually. Three-quarters of those were not in hardship programs.

Hardship scheme participants climbed 17 per cent in a year.

The Essential Services Commission has released a revised draft plan designed to better protect customers from running up big debts and risking disconnection.

“Over time, the average debt of customers in hardship programs has been increasing, and disconnections remain at historically high levels,” ESC spokeswoman Michelle Byrne said.

“This underscores the need to improve protections for customers facing payment difficulties. This is even more important in the context of rising prices.”

Proposed retail energy code changes set out mandatory minimum standards for assistance, such as offering flexible payments and advice to reduce costs, before retailers can pull the plug.

Companies cut off almost 20,000 households because of unpaid accounts in the six months to December.

“Ensuring customers receive timely, fair, consistent and predictable assistance will help them manage their debt, lower their energy costs and ensure disconnection only occurs as a measure of last resort,” Ms Byrne said.

Victorian Council of Social Service deputy CEO Mary Sayers said such measures were more important than ever because wages and income support were not keeping pace with skyrocketing energy costs.

The ESC report outlines three key types of help, depending on the extent of financial strife and customer co-operation.

Those in debt would generally get up to two years to repay arrears. In the most serious cases, repayments could be suspended for at least six months and a customer placed on the best tariff to help lower energy costs.

Retailers would also have to keep records proving they had exhausted all proper steps before cutting supply.

An earlier plan for a radical prepay system to avoid disconnection has been abandoned amid concerns it could cause even deeper problems for vulnerable consumers.

The proposals follow an inquiry that found customers in payment difficulty often used more energy than others; hardship programs often failed to stop debt growing; and help could be too late.

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@KarenCollierHS