Energy sector keen to improve safety net for customers struggling to pay bills

Thursday 2 September 2021, 3-4.30 pm (via Zoom)

Senior leaders from energy businesses operating across Victoria say they’re keen to work with the regulator on improving the payment difficulty safety net for customers struggling to pay their bills.

At a recent catch up with the sector, energy businesses told the Essential Services Commission, they see opportunities to improve the way the framework operates.

The roundtable session was the third held with energy leaders this year to discuss issues affecting the sector including the impact of the coronavirus pandemic.

On that front, the leaders told the commission while disconnections are on hold with restrictions in place, average debt for those already behind on their bills is increasing.

They said a broader conversation is needed about engaging customers who are struggling to pay earlier in the process before disconnection becomes a likely prospect.

The commission also heard:

• there are concerns over increasing energy efficiency certificate prices
• an increase in the number of life support customers may be having an impact on service levels to this group
• energy usage is up for residential customers and down for small business during lockdown
• balancing required maintenance of the networks deferred during last year’s lockdowns while limiting planned outages to minimise disruption is proving difficult.

Chairperson’s notes

Please note, this is a summary and not a verbatim transcript.

Good afternoon everyone and welcome to today’s energy leaders’ roundtable, our third this year.

To start, I would like to acknowledge the Traditional Owners of the land I am hosting this event on - for me that is the land of the Bunorong people of the Kulin nations.

I also acknowledge the Traditional Owners of the various lands you are on today, and the Aboriginal and Torres Strait Islander peoples participating today.

I pay my respects to Elders, past, present, and emerging, and the Elders from other communities who may be here today.

I would like to welcome you to today’s meeting and note that it’s been three months since our last roundtable on 10 June.

You might recall that meeting was delayed slightly due to a snap lockdown after what was, as it turns out, a brief period of respite after the long year of COVID.

Now, as we enter week five of lockdown six, the reality that the pandemic is far from over has well and truly settled in. Can I take the opportunity to thank businesses for keeping customers connected during this uncertain time in lockdown six. 

This time last year, I don’t think anyone around this virtual table would have envisaged we would be in this position today. And while we are in a current state of some uncertainty – I do feel hopeful.

Particularly as the vaccination rate takes off and there is talk of restrictions lifting as the weather starts to warm up. But today, we want to hear from you.

• What is the lay of the land right now for your businesses and your customers?
• What, if any, adjustments are you making to adapt to the latest lockdown?
• And what does 2022 look like? – if you can see that far ahead.

Today we also want to start a conversation with you about the planned review of the payment difficulty framework. As you would expect, we have done some thinking about what that review should look like but we want your input before we get too far down the path.

Commission update

I’d like to take just a few moments to take you through some of our priority projects that we will need your input on over the next few months.

First, many of you would be aware of a proposed bill being considered by the Victorian Government. Sitting alongside the Energy Fairness Plan legislation passed last month, this bill would enhance our enforcement powers and pave the way to remake our energy codes as codes of practice.

We will commence consultation as soon as we can once the bill is introduced in parliament – starting with the energy retail code followed by the distribution code next year. We do not expect this process will make any policy changes – we see this as a technical process to turn the code into a subordinate instrument.

Because the proposed bill foreshadows greater enforcement tools, we want to ensure there is a better understanding about how we will use these powers.

To do that, we will provide new guidance and education materials to the sector, and we will keep you updated on what we intend to provide in due course. We want to encourage and assist businesses to comply voluntarily.

We will also be updating the compliance and performance reporting guideline at the same time as they are clearly connected.

As I said earlier, we will engage with you once the bill has been introduced to parliament and look forward to being able to provide you with more information at that time. I wanted to let you know that we are proposing that there be a forum after release of the proposed code and compliance and performance reporting guideline at which myself and fellow commissioners will be present. I look forward to discussing the new reforms at that point.

Also coming up, you will be aware the revised Victorian default offer came in to effect yesterday (1 September to 31 December) with a small reduction due to falling wholesale prices.

Meanwhile, the process for setting the new default offer that will apply from 1 January 2022 is underway with a draft decision due out shortly.

As well as these significant pieces of work, the energy team’s plan for this financial year also includes making ongoing improvements to our market monitoring and reporting.

Each group was then invited to provide an update on what is happening for their businesses and customers 18 months into the pandemic.

Payment difficulty framework review

Senior regulatory manager analysis and reform, Aaron Yuen provided an overview of our proposed approach to the payment difficulty framework review.

The group provided feedback on the proposed approach including the engagement plan, scope and focus of the review. This feedback, along with feedback from other stakeholders will inform further planning for the review.

In closing

Can I take this opportunity to acknowledge and thank you, and the businesses you represent, for your efforts to date.

Today we’ve heard there are concerns about the rising price of energy efficiency certificates and that an increase in the number of life support customers may be having a negative impact on serving these customers.

We heard earlier engagement is needed with customers struggling to pay their bills before disconnection becomes a real prospect. Distributors told us they’re trying to balance the need to catch up with delayed network maintenance with minimising planned outages during lockdowns.

And finally, on the payment difficulty framework review, we heard there’s a strong appetite for a data driven approach along with early and constant engagement.

Thanks again for your attendance today and I look forward to seeing you again next time.