The statement was introduced to grant additional protections to consumers who had been placed in vulnerable positions during the Covid-19 pandemic and associated economic shock. Among other things it prevented retailers from disconnecting or threatening to disconnect consumers who were unable to pay their bills.
It is clear that the pandemic we are living through is far from over and, as winter sets in, the ripples of Covid-19 continue to be felt. We’ve seen the coldest start to an Australian winter in more than a century in some parts of Australia, and it is vital that we make sure that every Australian, including our most vulnerable, can stay warm, safe and comfortable through this period.
In this context the AER has adapted the protections afforded to consumers during the pandemic – as outlined in the Statement of Expectations – and replaced them with three principles under a “Standby Statement of Expectations” that can be applied during periods of lockdown. These are:
- Offer all residential and small business consumers who indicate they may be in financial stress a payment plan or hardship arrangement.
- Do not disconnect any residential or small business consumers who may be in financial stress (including residential and small business consumers in an embedded network) without their agreement.
- Defer referrals of residential and small business consumer to debt collection agencies for recovery actions or credit default listing.
The standby Statement will apply from 1 July 2021 to households and small businesses in the areas affected by the current New South Wales stay-at-home orders. The additonal protections it provides to those consumers will apply for two weeks after the stay-at-home order ends.
Difficult but necessary
As strong advocates for all energy consumers, and for the idea that the energy system must be an inclusive one that works for all, this is a complex matter. We applaud the efforts made by many across the energy sector to apply a pragmatic and compassionate filter to the events of the past 18 months. We also recognise that these protections could not remain in place perpetually. As more and more consumers have been placed onto debt or payment deferment programs the average size of the debts they owe has continued to grow.
New data from the AER shows that average energy debts are now roughly equivalent to a year’s worth of bills. This means the amount owed by some could be much higher. By continuing to defer repayment into the future there is a very real chance that households and businesses would be accruing energy debts they could never realistically repay (or that would take a crippling amount of time).
Lifting the SoE is necessary (with some sensitivity applied to areas that are currently locked down) but it does not and should not stop retailers from doing the right thing. Pragmatic compassion is still very much required. Like the regulator itself we will be closely monitoring disconnections and we urge any consumers who need these access to a debt deferment or payment plan to contact their retailer and ask for it.
What to do if you need help
We encourage anyone who needs assistance with their energy bills to check out our resources page, which outlines some helpful tips and tools for consumers. You can also access information on how to get a better deal at the Australian Government’s Energy Made Easy website.