Push for ‘default’ monthly electricity bills to help people cope with costs

HUGE energy debts racked up by distressed customers have sparked calls for a widespread switch to monthly electricity bills, instead of quarterly charges.

Customers are feeling the pinch from rising electricity prices. Picture: iStock

DISTRESSED energy customers with unpaid bills as high as $11,000 are seeking help from financial counsellors.

The debt crisis has prompted calls for hundreds of thousands of Victorians to be switched to monthly electricity bills by default, instead of quarterly accounts, so they can budget.

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Struggling pensioners, the unemployed and other concession cardholders — plus any customer changing to a new retailer — would be automatically billed monthly.

Those wanting quarterly accounts would have to explicitly request them, the Consumer Action Law Centre and Financial and Consumer Rights Council propose.

“More frequent billing ... makes it easier to accurately budget ahead of time and reduces the risk of bill shock,” a submission to the state’s energy regulator argues.

Quarterly power bills are leading to a Victorian debt crisis. Source: iStock

Although some retailers have monthly billing options, quarterly electricity accounts are an industry standard.

“At a minimum, retailers should be required to place customers who they reasonably believe to be at higher risk of experiencing payment difficulties — including concession customers, those using Centrepay, or receiving a government allowance — on monthly billing arrangements as a default, with the option of quarterly billing if desired.

“More broadly, we recommend the retail code should be amended to make monthly billing the default for all new energy customers, with quarterly billing an opt-in option for those who prefer it,” the submission to the Essential Services Commission states.

Thousands of Victorians are under power bills stress. Source: iStock

Customers would be less embarrassed to discuss payment difficulties with a retailer if bills were lower, reducing the risk of huge debts amassing before intervention.

Victoria’s digital smart meters, which record electricity use every 30 minutes, allow for accurate monthly billing.

The submission also suggests that retailers be forced to explain the potential pitfalls of pay-on-time discount terms to concession customers.

“Pay-on-time discounts are nothing more than late payment penalties in disguise, and in effect add hundreds of dollars to the annual bill of a customer who can’t pay their bills by the due date.

“Retailers should be obligated to quantify the amounts customers stand to lose on these offers as part of the initial discussion and disclosure.”

@KarenCollierHS