Victorian energy consumers are in financial stress, but disconnections are down

A new report has found that Victorian energy customers are in more financial stress than last year, but disconnections are down.

Power bill pain is growing for Victorian households, a new report has found.

Missing payments, taking on debt, and accessing relief grants. A new report from the Essential Services Commission has found Victorians are in more financial stress over their power bills than they were last year.

Despite this, fewer customers have been disconnected for non-payment this year.

On average, 218,000 households missed an electricity payment and 158,000 missed gas payments each month in 2023-24. This represents 8 per cent of all customers.

More people were also in debt with their retailer, with an average of 121,000 electricity customers and 93,000 gas customers owing at least $300 each month – 5 per cent of all customers.

Essential Services Commission chair Gerard Brody said he was pleased to see fewer disconnections, although the other findings of the report were concerning, particularly for those experiencing payment difficulty.

“The data highlights there are many customers in arrears that are not receiving payment assistance. We expect retailers to be proactively identifying and offering support to customers experiencing payment difficultly,” Mr Brody said.

Essential Services Commission chair Gerard Brody expects retailers to be proactive in helping struggling customers.

Disconnection is considered a last resort under minimum standards set out by the Energy Retail Code of Practice. Before disconnecting a customer from electricity or gas supply, retailers must offer assistance to customers who miss a payment.

They also cannot disconnect a customer who is receiving assistance, may only disconnect someone who owes more than $300, and must send a reminder and disconnection warning ­notice before cutting off supply.

In its report, the commission said it was concerned that more customers had exited assistance plans due to not being able to meet the plan requirements.

The commission noted that customer’s abilities to meet the requirements of their payment plans “vary widely” between different retailers.

In the past four financial years, Sumo Power, AGL and Powershop had the highest proportion of people leaving their payment plans.

The commission said that the gap between these retailers and the market average had grown over time.

It found increasing financial stress was causing customers to struggle with their payment plans, and said: “It could also indicate that retailers are not providing suitable payment plans that support customers to repay their arrears.”

Mr Brody said: “Energy retailers must provide assistance to residential customers to help them avoid getting into arrears and assist those who are in ­arrears.

“It is important that retailers communicate effectively with customers experiencing difficulty paying their energy bills rather than placing too much reliance on disconnection warning notices.”