The Economic Regulation Authority of Western Australia (ERAWA) has released two annual data reports that demonstrate the impact of cost of living pressures on energy customers, with high inflation and rising interest rates influencing electricity and gas affordability, leading to record debt for some customers.
The ERAWA has published two annual data reports, which show the latest trends in energy retailers and distributors’ performance since 2016.
Retailers report that in 2021/22, COVID-19 pandemic support measures continued to influence the experiences of residential customers.
These measures included electricity and gas suppliers temporarily halting disconnections and a $600 electricity credit in November 2020 and an additional $400 electricity credit in July 2022 for residential customers.
The number of electricity customers in hardship has since returned to the levels observed prior to pandemic assistance measures and the number of gas customers in hardship is the highest ever reported.
This increase appears due to the debt accrued by some customers while the pause in electricity and gas disconnections was in place. However, most hardship customers were successful in completing their repayment plan.
Despite state government support measures, average residential bill debt for non-hardship customers has increased for both electricity and gas retailers.
On 30 June 2022, Synergy customers’ average debt reached $766, its highest level in six years, and Horizon Power customers’ average debt reached $974. Average bill debt for customers in hardship programs also remained higher than pre-pandemic levels.
In addition to reporting this data, ERAWA has sought to support customers experiencing difficulties paying their electricity bill by introducing new protections in the Code of Conduct for the Supply of Electricity to Small Use Customers.
These changes will require retailers to extend assistance to manage payments to all customers who request it, set a bill debt of $300 before a residential customer can be disconnected, and offer specific assistance and protections to customers experiencing family and domestic violence. These protections will commence on 20 February 2023.
Steve Edwell, Chair of the ERAWA, said, “The data signifies increasing cost of living pressures on energy customers. Despite the pandemic related customer protection measures, subsequent high inflation and rising interest rates are affecting the affordability of electricity and gas services.
“Given these macro-economic circumstances, the ERAWA encourages retailers to maintain their focus on flexible payment arrangements and hardship support schemes to ensure customers can continue to access energy as an essential service.”
Distributors performance reporting obligations apply only to distributors serving small use customers, who are residential and small business customers consuming less than 160 megawatt hours of electricity or one terajoule of gas a year.
This comprises Western Power, Horizon Power, Rottnest Island Authority and Peel Renewable Energy in respect of electricity, and ATCO Gas Australia, Wesfarmers Kleenheat Gas and Esperance Power Station for gas.
Western Power’s reliability performance deteriorated in 2021/22 compared to the previous year. Overall, there was a seven per cent increase in customers experiencing extended interruptions (longer than 12 hours).
There was a three-fold increase in Perth and urban customers experiencing more than nine interruptions in the year and a nine-fold increase in rural customers experiencing more than 16 interruptions.
Poor levels of service in some parts of Western Power’s network are a particular area of focus in the ERAWA’s review of Western Power’s next access arrangement, which extends through to 2027.
Other energy distributors have generally met reliability standards; Horizon Power has met the outage duration standard for the fourth consecutive year and only one per cent of Horizon Power customers experienced an extended interruption (longer than 12 hours).
The gas distribution networks have consistently high reliability, with less than 0.1 per cent of ATCO’s customers and none of Kleenheat or Esperance Power Station customers experiencing an outage in the reporting period.
Mr Edwell said, “We know that poor levels of reliability in some parts of Western Power’s network are significantly impacting customers.
“We’re currently reviewing Western Power’s access arrangement, with a focus on improving reliability performance.”