6 December 2017

Bill shock: more have power cut off as debt levels rise

| Ian Bushnell
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Power crisis: the ACT cops heavy electricity bills and high levels of disconnections.

Surging electricity bills in the ACT are taking their toll in the Territory, with 10 percent more disconnections and higher levels of debt in 2016-17, according to the latest report from the Australian Energy Regulator.

The AER Performance Report on Compliance & Performance of the retail energy market 2016-17 said that in the ACT, 427 premises were disconnected in 2016-17 compared with 388 the previous year.

For an ACT low-income household on the median market offer, the annual electricity bill in 2017 increased by 5.2 percent to $1,266 (3.7 percent of income) without a concession, or $1,065 (3.1 percent of income) with a concession. The median standing offer increased by about 11.5 percent, from $1,244 to $1,387.

Low-income households on the median standing offer would be paying over $100 more than if they were on the median market offer.

A middle-income household using 7500 kWh per annum in the ACT spent 1.5 percent of its disposable income on electricity, while the same usage for a high-income household would account for 0.7 percent of disposable income.

There was some relief for gas consumers with bills down 1.2 percent from the previous year, although gas debt remained high.

A low-income household on the median market offer paid $1,514, or $1,313 with a concession, compared to $1,533 ($1,334 with concession) the year before. This represents 4.5 percent of disposable income (3.9 percent with a concession).

However, the ACT had the highest proportion of gas customers in debt (almost 5 per 100 customers, but down from 8 the previous year), the highest gas debt of any jurisdiction at $3,193 and the highest rate of businesses with gas debt (7.1 per 100).

The debt customers held when they started receiving hardship assistance increased everywhere except Tasmania, with the ACT recording its fifth consecutive increase in the average debt of these customers, rising by $245 to $1537.

The average debt of customers commencing hardship assistance rose across all jurisdictions, with the ACT on top with debt of $1,783, an increase of $677, reversing a decrease of similar size in the previous year.

The average electricity debt in the ACT upon entry to a hardship program was up $245 to an average debt of $1,538, while the average electricity debt was up $454 to $1545.

The average gas debt upon entry to a hardship program was up $678 to $1784, with the average gas debt up $340 to $2,157.

The average debt of customers not on hardship programs increased in all jurisdictions except the ACT, where it fell slightly.

The proportion of ACT customers on hardship programs receiving concessions increased by 15 percent, to 74 percent, with gas hardship customers receiving an energy concession rising 17 percent to 43 percent.

But the number of gas disconnections in the ACT in 2016-17 fell sharply to a quarter of their 2015-16 level, at 423, down from 1,403 the previous year.

Nationally, most energy retailers answered at least 80 percent of calls within 30 seconds and had average waiting times of less than one minute, but ActewAGL had the longest waiting time at nearly four minutes.

The AER said rising electricity prices were leading to increased numbers of consumers falling behind on power bill payments and struggling to complete financial hardship assistance programs.

The report showed increased numbers of electricity disconnections, higher levels of energy debt held by those customers not in a formal hardship program and fewer customers successfully completing hardship programs than in the previous year.

AER Chair Paula Conboy said across all jurisdictions, electricity debt levels had increased and electricity disconnections increased in Queensland, the ACT, and South Australia, but decreased in New South Wales.

“The increase in the number of electricity customers being disconnected is troubling: disconnecting a customer is a serious measure and we consider that this step should only be taken as a last resort by retailers.” Ms Conboy said.

She said the fact only 27 percent of customers who exited retailer hardship programs in the last year did so successfully, raised questions about the effectiveness of those programs. The rate of customers exiting a hardship program due to exclusion – being unable to meet agreed repayment conditions – increased across both the electricity and gas sectors from the previous year.

Ms Conboy said the AER would focus on retailers’ compliance with their hardship obligations in the coming year.

“We are reviewing retailer hardship policies to ensure that all retailers are identifying, engaging with, and providing appropriate assistance to customers. Hardship policies need to provide real assistance to more consumers. We will use all the tools available to us to ensure retailers are meeting their obligations to customers in this very important area.”

Have you experienced any disconnections or issues with your power bills recently? Comment below.

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Reminds me of the higher water rates after the long drought because ACTEW (or what ever they’re called this week) were losing money from lower water useage by Canberrans who played their bit

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