We reviewed the framework designed to support energy consumers facing payment difficulty.
Payment difficulty framework implementation review 2021
- Launch of review2 September 2021
- Phase 1: Engagement and insights, information, data and engagement analysesSeptember 2021 to April 2022
- Findings report31 May 2022
- Phase 2: Better practice programJune to August 2022
- Review closeAugust 2022
Overview
Our review of payment difficulty framework focuses on evaluating the implementation of the framework in meeting its objectives, relying on direct customer experiences, and data and information relating to the implementation of the framework. We have released our findings from the review. We found that the payment difficulty framework helps Victorian energy consumers manage their energy costs but that retailers can do more.
What is the payment difficulty framework?
The payment difficulty framework is a set of energy rules to better protect and support residential customers that are anticipating or facing payment difficulty. The framework was developed in 2017 in response to high numbers of residential customers being disconnected for non-payment.
Its objectives are that:
- customers are supported to pay their ongoing energy use, repay their arrears and lower their energy costs
- customers are only disconnected for non-payment as a last resort, and
- customers avoid getting into arrears with their retailer.
We also now have an increased awareness that the barriers to getting help are exacerbating the experience of vulnerability.
Our key findings
Implementation of the framework is broadly meeting its objectives
- More customers are receiving more appropriate assistance.
- There have been fewer disconnections for non-payment, but more than half of these customers had not received assistance beforehand.
- Energy customers’ awareness and knowledge of their entitlements continues to vary.
Customer outcomes vary significantly between and within retailers
- Average customer arrears vary by retailer, despite assistance aiming to help customers avoid getting into arrears.
- Retailers’ use of discretion in delivering payment plans varies.
- Concessions and utility relief grants can be more effectively provided to customers as part of payment assistance.
- Lowering energy costs and usage is also key to supporting customers.
The level and quality of retailer-customer engagement affects customer outcomes, and customers who can pay for their ongoing energy use benefit most
- The appropriateness and timing of retailer communication with customers varies.
- Early intervention with customers improves outcomes.
- Some retailers are more successful in engaging with customers before they build up large arrears.
- Some customers requiring support with their energy bills may be experiencing multiple barriers.
Improving the operation of the framework
Our findings show that the framework delivers positive outcomes for customers when it is implemented effectively. However, we have identified areas where implementation could be improved for the mutual benefit of customers and retailers. We have identified particular areas as a priority for improvement (*).
Customer outcomes vary significantly between and within retailers
- Improve retailers’ effectiveness of establishing and reviewing payment arrangements and plans.*
- Improve customer access to payment arrangements from their retailer.
- Improve retailer processes to ensure eligible customers are receiving concessions and utility relief grants.*
- Improve appropriateness and timing of assistance provided by retailers to customers about lowering energy usage and costs.*
- Increase retailers’ understanding of customers in payment difficulty with high energy use, to help tailor approaches to energy efficiency.
- Improve the way that retailers link customers to existing energy efficiency and usage schemes and programs.
The level and quality of retailer-customer engagement affects customer outcomes
- Improve retailer interactions with customers, focusing on communication that recognises a customer's circumstances, including the barriers they may be facing.*
- Further support customers’ entitlement to assistance during retailer communication.
- Promote earlier customer engagement by retailers.
- Improve retailer links with trusted third parties who support their clients or customers.
Customers who can pay for their ongoing energy use benefit most
Consider alternative approaches to support customers prior to disconnection, particularly for those who cannot pay for ongoing use.
Read our findings report
This report sets out our findings into the review of the implementation of the payment difficulty framework since 2019. Appendices include call recordings study scope and methodology, additional consumer insights and early observations workshop report.
The 14-page executive summary comes directly from the findings report. It is summarises our approach to the review, our key findings and priority areas for improving the operation of the payment difficulty framework.
Accompanying our findings report is the call recordings study report. This report presents the results and findings of the call recordings study undertaken for the commission by ORIMA research. Included with this report is Appendix A: select retailer data (deidentified) and five case studies of customer journeys. These case studies describe the experience of the customers during the duration of the call recordings study period. They have been de-identified to protect the privacy of these customers and their retailers.
Our review
Review phase 1: Engagement and insights, information, data and engagement analyses
We began the first phase of our review in September 2021, by engaging on our proposed scope and approach for the review. In doing so we confirmed that the purpose of the review was to evaluate and assess the framework’s ability to meet its objectives.
We also committed to identifying options for improving the operation of the framework.
While undertaking the first phase of the review, we sought to understand:
- the ways the payment difficulty framework has been implemented by retailers
- consumers’ experience of the framework, and
- the perspectives of community sector organisations.
To inform this findings report, we developed our analyses using a range of inputs, data and feedback as follows:
- Analysis of customer outcomes, based on data from obtained from retailers, distributors and relevant government agencies (such as the Department of Families, Fairness and Housing).
- Stakeholder feedback from workshops and submissions.
- Customer voices through call recordings. We engaged ORIMA Research to undertake a study on these call recordings, with a study report that accompanies this review.
- Consumer insights research drawn from publicly available sources, including direct research we conducted to develop our ‘Getting to fair’ strategy in 2021.
We also committed to not revisiting the policy rationale behind the framework, which was substantively consulted on in 2017. The review would also not consider reforms to associated government programs and policy.
Review phase 2: Better practice program
In the second phase of the review, we explored priority areas further with our stakeholders to identify and consider practical solutions to better support the implementation of the framework.
In July and August 2022, we facilitated a better practice program consisting of three virtual workshops with retailers and community service organisations, to discuss and share practical actions and ideas that can be implemented by retailers to support customers under the framework. Each workshop focused on areas for improvement identified in the findings report.
The notes from each workshop are available here and under the Review documents and submissions tab.
How we engaged and what we heard
From September to December 2021, we ran a program of engagement activities designed to inform the review of the implementation of the payment difficulty framework.
Our stakeholder engagement focused on gathering views of the implementation of the framework – to identify aspects that are working well and areas for improvement.
| Date | Activity |
|---|---|
| 2 to 19 September 2021 | Launch of the review and engagement on review approach |
| 20 September to 30 November 2021 | Engagement on key review questions |
| 16 November 2021 | Early observation stakeholder workshop |
| November and December 2021 | Meetings with key stakeholders |
| November 2021 to April 2022 | Meetings and discussions with retailers about further data requests and call recording study |
| 7 April 2022 | Early findings stakeholder webinar |
September 2021: our approach
We invited submissions on our proposed approach from 2 to 19 September 2021. Our engagement focused on the appropriateness of the scope and purpose of the review. We received 11 submissions from a variety of stakeholders including community representatives, energy retailers and energy consumers.
There was a general level of comfort across the submissions about the scope of the review and the appropriateness of our review questions. Many submissions emphasised the need to refer to both quantitative, as well as qualitative, data throughout the review and welcomed our proposed collaborative approach to stakeholder engagement.
We also received a number suggestions of areas or issues for us to consider such as:
- other sources of information to refer to
- the application of the framework rather than the framework itself
- addressing any issues or discrepancies in the current framework
- the interaction between customer debt and customer engagement.
After considering this early feedback, and given the level of comfort expressed in submissions, we did not change our proposed approach to the review or our key review questions.
November 2021: our key review questions and early observations
Between 19 September and 30 November 2021, we invited your feedback on our key review questions. This second engagement process focused on understanding stakeholders’ observations and experiences of the implementation of the payment difficulty framework.
We ran a large stakeholder workshop which had approximately 90 key external stakeholders in attendance, and other individual meetings with stakeholders. Our early observations come from our preliminary analysis of quantitative data submitted by retailers, and consumer insights from various case studies, surveys and research. This document was used to inform a stakeholder workshop in November 2021. A report on the feedback we received during this workshop is provided as an appendix to our Findings report.
We received 15 submissions in response to our key review questions. These submissions were from customer advocacy groups, community organisations and the energy industry. Some of the themes that emerged from the feedback we received in response to our key engagement questions include:
- variability in interpretation, awareness and application of the payment difficulty framework.
- difficulties engaging with customers about their bill payments.
- barriers to customers receiving assistance under the framework.
- unintended consequences of entitlements, such as increased levels of debt for customers receiving assistance.
- impacts of COVID-19.
April 2022: our early findings
On 7 April 2022, we held a webinar to present our early findings and seek participant views on priorities for focus in the next phase of the review. We had over 80 participants from government, the energy industry and the community sector. A video recording of the webinar is available on YouTube. The slides and poll results are also available here.
All submissions received can be found under the Review documents and submissions tab.
Review documents and submissions
August 2022: Better practice program
27 September 2022
This document provides notes on the discussions from workshops from the better practice program facilitated with retailers and community service organisations to help support customers under the payment difficulty framework. The notes capture the discussion from stakeholders and do not necessarily represent the views of the commission.
(pdf, 293.67 KB)
May 2022: Findings report and call recordings study
31 May 2022
This report sets out the commission’s findings into the review of the implementation of the payment difficulty framework since 2019. Appendices include call recordings study scope and methodology, additional consumer insights and early observations workshop report.
(pdf, 2.45 MB)
31 May 2022
This 14-page executive summary comes directly from the findings report and summarises our approach to the review, our key findings and priority areas for improving the operation of the payment difficulty framework.
(pdf, 462.41 KB)
May 2022
This report presents the results and findings of the call recordings study undertaken for the commission by ORIMA Research.
(pdf, 642.67 KB)
May 2022
This appendix presents select call recordings study results by retailer (deidentified).
(pdf, 405.32 KB)
May 2022
ORIMA Research prepared five case studies of customer journeys of customers included in the call recordings study. These case studies describe the experience of the customers during the duration of the call recordings study period. They have been deidentified to protect the privacy of these customers and their retailers.
(pdf, 723.37 KB)
April 2022: Preliminary findings webinar
On 7 April 2022, we held a webinar to present our early findings and seek participant views on priorities for focus in the next phase of the review. We had over 80 participants from government, the energy industry and the community sector. The feedback we received will inform our final findings report to be released in May 2022. A video recording of the webinar is available on YouTube.
November 2021: Our early observations
November 2021: Submissions to key review questions
Between 19 September and 30 November 2021, we invited your feedback on our key review questions. This second engagement process focused on understanding stakeholders’ observations and experiences of the implementation of the payment difficulty framework.
September 2021: Our approach to the review
September 2021: Submissions to our approach
Research reports
These pieces of research are referred to in our findings report. We commissioned these pieces of research in the course of our other regulatory work but have relevance to the payment difficulty framework and have helped to inform our review.
November 2021
As part of the development of our Getting to fair strategy, we commissioned research collecting community workers’ experiences with recent Victorian energy market reforms. Between August 2020 and May 2021, interviews were conducted with 44 support workers from 18 community organisations to understand how consumers facing vulnerability are experiencing the Victorian energy market, including the payment difficulty framework.
(pdf, 828.04 KB)