Energy providers urged to protect business, households through coronavirus hibernation
Energy regulator urges retailers to waive any disconnection, reconnection and contract break fees for small businesses.
The Australian Energy Regulator is putting pressure on the nation’s energy retailers and networks to protect households and small businesses through a “hibernation” period as they cope with the economic shock of COVID-19.
Josh Frydenberg and Angus Taylor said the government would closely monitor retailer and network compliance with the new AER measures.
Under a new AER statement of expectations, the regulator has urged retailers to waive any disconnection, reconnection and contract break fees for small businesses who have “gone into hibernation”.
AGL responded on Friday afternoon, announcing a COVID-19 customer support program which will provide fast-tracked access to defer payments and a commitment to suspend disconnections until July 31 for customers under financial stress.
The AER wants energy companies to waive daily supply charges to retailers during any period of disconnection through to at least July 31 and offer “all households and small businesses who indicate they may be in financial stress a payment plan or hardship arrangement”.
Energy companies will be expected to defer referral of any customer to a debt collection agency until at least July 31 and potentially beyond and minimise the frequency and duration of planned outages for critical works.
The Treasurer said the electricity and gas sector was “an essential service” and had an “obligation to support customers through these difficult times”.
“The government is focused on working to slow the spread of the virus, while putting in place actions to limit the impact of COVID-19 on people’s lives, jobs and businesses – and industry must play their role,” Mr Frydenberg said.
Mr Taylor, who has been pushing the big energy companies to deliver urgent support for customers in response to COVID-19, said it was “vitally important that we all pull together to help those who are being impacted” by coronavirus.
“While several energy companies have taken some steps to assist their customers in financial stress, during these difficult times we expect more action,” the Energy Minister said.
“We expect them to do more to help small businesses who have gone into hibernation to avoid any energy costs, and we expect them to pass on the huge price drops we are seeing in the wholesale market.”
Mr Frydenberg and Mr Taylor said it was important that customers who can pay their bills “continue to do so”.
AGL chief executive Brett Redman said they would provide “direct relief to AGL residential and small and medium business customers who aren’t able to pay their bill because they have lost their job or business, or their health has been impacted”.
“For those under financial stress, we have extended payment terms and will suspend disconnections for customers on the program until 31 July,” Mr Redman said.
Mr Redman said the measures were in addition to AGL’s “well-established hardship programs most recently used to provide relief during the summer bushfires”.
The AGL package also includes access to payment plans allowing customers to pay in instalments, a commitment to not disconnect businesses and individuals during the deferred payment period and waiving disconnection and reconnection fees for small businesses who have been forced to temporarily close.
Snowy Hydro chief executive Paul Broad said the government-owned company, through its retail brands Red Energy and Lumo Energy, had already put in place a “range of protective measures” in response to COVID-19.
These include ceasing disconnections for customer and small business debt, putting in place 300 customer solutions consultants to deal with customers experiencing financial difficulty and not applying interest charged on debt.
Mr Broad said its customer solutions teams had seen a “significant increase in calls from customers reporting job losses and seeking assistance”.
“We have deployed extra staff, many working overtime to cope with the demand,” Mr Broad said.
“More broadly as an essential services provider we are well prepared to deal with COVID-19. Snowy Hydro is operating at full capacity and Snowy 2.0 is continuing as planned.”
Origin CEO Frank Calabria said the company supported the AER measures.
“Increasing numbers of Australians are going to be worrying about how they will pay their bills on time, and we want to reassure people that if they are with Origin and they have been impacted by COVID-19, we will support them and keep the lights on,” Mr Calabria said.
Mr Calabria said they had put a “pause to all late payment fees effective immediately” and committed to not disconnecting any residential and small business customers in financial stress until at least July 31.
