The Federal Government, through the Australian Energy Regulator (AER), has set out reasonable expectations of energy companies in an effort to safeguard householders and small businesses during the COVID-19 pandemic.
The Australian energy industry has responded to the expectations and is banding together to meet its obligations.
The AER’s Statement of Expectations sets out a range measures, including:
- Waiving any disconnection, re-connection and/or contract break fees for small businesses which have gone into hibernation, along with daily supply charges to retailers, during any period of disconnection until at least 31 July 2020
- Offering all households and small businesses who indicate they may be in financial stress a payment plan or hardship arrangement
- Not disconnecting customers who may be in financial stress, without their agreement before 31 July 2020 and potentially beyond
- Deferring referral of any customer to a debt collection agency for recovery actions, or credit default listing until at least 31 July 2020 and potentially beyond
- Minimising the frequency and duration of planned outages for critical works, and providing as much notice as possible to assist households and businesses to manage during any outage
Federal Treasurer, Josh Frydenberg, and Minister for Energy and Emissions Reduction, Angus Taylor, said the government will be closely monitoring retailer and network compliance with these measures.
“The electricity and gas sector, as an essential service, has an obligation to support customers through these difficult times,” Mr Frydenberg said.
“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 Taylor said it was imperative for energy companies to help customers who are experiencing difficulty.
“It is vitally important that we all pull together to help those who are being impacted by COVID19,” Mr Taylor said.
“While several energy companies have taken some steps to assist their customers in financial stress, during these difficult times we expect more action.
“We expect energy companies to look after their customers, keep them connected and waive additional fees and charges for those doing it tough.
“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.”
The Australian Energy Council (AEC) has already begun taking proactive assistance measures to its customers, including:
- Payment extensions
- Payment plans
- Bill smoothing and other options to help customers avoid large bills
- Assistance with accessing grants and concessions
- Advice on how to manage usage, including tips to lower bills
The AEC has also noted that this crisis requires a whole of sector response, and that the responsibility should not lie with retailers alone.
In addition to these key commitments, the AEC will be working with networks, governments, and other stakeholders to ensure emergency relief payments and other concessions are readily available and sufficient, as well as to work on developing other support measures as will no doubt be necessary over the next six months.
As Australians enter winter and consumption increases, these challenges will only escalate, therefore, the AEC recommends that a collaborative response from all parties will ensure retailers continue to be able to assist their customers both now and into the future.
EnergyAustralia Chief Customer Officer, Mark Collette, said, “The COVID-19 situation is unlike anything we have seen or experienced before. We support the call by the AER for a whole-of-industry response to help households and businesses nation-wide get through this challenging time.
“The AER has highlighted the need for network companies to support energy customers by waiving fees and extending payment terms; retailers alone cannot deliver what is needed to support customers.
“EnergyAustralia supports customers in financial stress every day through our EnergyAssist hardship program. We help each customer in financial stress who reaches out for help by tailoring payment plans, providing advice on grant programs customers may be eligible for and advice on energy usage.”
Origin CEO Frank Calabria said, “Origin believes action across the energy industry is the best way to help ease the financial pressure on customers who have been impacted by COVID-19 and we support the measures outlined by the Australian Energy Regulator.
“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.
“We have always protected customers in our hardship program from disconnection, and we are committed to not disconnecting any residential and small business customers in financial stress until at least 31 July 2020.
“We have also put a pause to all late payment fees effective immediately.
“We encourage collaboration across the energy supply chain including between retailers, networks, the market operator and regulators, plus federal and state governments, to make sure that together we share the burden of what are likely to be significant and lasting impacts from COVID-19 on large numbers of customers.”
Snowy Hydro CEO, Paul Broad, said Snowy, through its retail brands Red Energy and Lumo Energy, is continuing to lead the industry on assisting customers experiencing financial hardship.
Mr Broad said that Snowy Hydro has already introduced a range of protective measures, which were similar to its response to the recent bushfire crisis.
These measure include:
- Ceasing all disconnections for customer and small business debt
- 300 customer solutions consultants taking calls and additional resourcing to support the customer care team, who deal with customers experiencing financial difficulty
- No interest charged on debt
Mr Broad said, “Red and Lumo’s customer solutions team has already 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.
“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.
AGL has also recently announced its COVID-19 Customer Support Program, which will provide fast-tracked access to a program that defers payments and suspends disconnections until July 31 for customers who may be under financial stress as a result of the pandemic.
The Government believes it is important customers who can pay their bills continue to do so, while the energy companies do more to help those in need, beyond the business-as usual hardship arrangements.
The AER has also announced that it is also amending its performance reporting framework to allow more timely access to data on payment plans, hardship, disconnections and credit collection.
This enhanced reporting will allow the AER and the Government to quickly identify where energy customers are experiencing difficulty and to act accordingly.
To view the full Statement of Expectations, click here.