A crucial inquiry into the reasons more than 58,000 disconnections concerning electricity and gas within residential homes has been set up by the local government. Disconnections with regard to electricity alone set a new record at 34,000 homes deciding to shut down their power supply. More than 24,000 homes have also had their gas shut off during the previous financial year.
Statistics from 2013/14 indicate that homes which have disconnected from electricity increased by 36% while the number of homes shutting off their gas increased by 42%.
Disconnections rates represent highest ever recorded
According to Energy Minister Lily D’Ambrosio, these figures represent the highest rate of disconnections ever recorded by the Essential Services Commission.
“These are figures that you can’t ignore and no government should ignore. That is an incredible number of people who essentially can’t get access to their gas and electricity … and that is too high a figure,” she stated.
As stated by the Essential Services Commission, electricity tariffs have escalated by approximately 2.5% during 2013/14 while increasing by close to 20% during 2012/13. These numbers took into account the increases due to the carbon price.
The Andrews Government have requisitioned for the Essential Services Commission to have a look at the financial hardship programs of energy companies.
Increasing cost of power results in rising number of Australians left in the dark
Jason Davies-Kildea, Salvation Army captain has received information that those working at call centres do not mention that their specific companies have certain policies in place in order to aid those who struggle to meet their electricity bills.
The Salvation Army is especially worried about those seeking asylum within Australia as they have to make do with decidedly lower welfare stipends from the government when compared to Australian citizens.
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The Victorian Council of Social Services are shocked at the rapid rate at which Victorians are being disconnected from the system, as many reports are suggesting that retailers must do more to make sure that customers are not treated in an unfair manner.
“Since 2010 the rate of wrongful disconnections of Victorian energy customers has increased six-fold, providing firm evidence that too many energy retailers have taken a harsh and punitive approach to the supply of what are essential services,” deputy chief executive Mary Sayers said.
Janine Rayner a Consumer Action Lawyer has indicated that there are anecdotal reports where many utility companies have been disconnecting consumers when they realise that they are under financial strain.
Reports utility companies have been wrongfully disconnecting consumers
As such many homeowners are going to extreme measures in order to ensure they do not receive a very big electricity bill at the end of the month. Such measures include people using facilities at their local pool to shower or keeping the lights off during the evening.
In order for a residential gas and electricity disconnection can take place, the retailer has to issue a reminder notice, a disconnection warning notice and lastly make a final attempt to contact the client directly in order to discuss payment and disconnection procedures.
Ms D’Ambrosio has stated that people cannot survive without electricity or gas. “There is something terribly wrong when we have more than 30,000 consumers disconnected from energy supply each year”.
She has maintained that Victorian energy customers must be treated as the community that they are, as such when a neighbour is disconnected it affects the community as whole creating a society that Ms D’Ambrosio is not happy with.
As the costs of energy are increasing a review of the policies and the practices regarding that of energy utilities concerning those clients struggling to pay their bills at the end of the month is long overdue.
“Our inquiry, our review, will get to the bottom of the reasons for the disconnections, but also importantly will look at what the energy retailers are actually doing in terms of their policies for identifying financial hardship amongst their customers early enough so they can offer assistance,” she said.
Financial hardship programs included in the proposed solutions
The Essential Services Commission will look at both the policies and the practices of energy retailers. The Commission must ensure that utilities do not act hastily in disconnecting homes that cannot pay immediately and will aid in looking at new means of measuring the efficacy of financial hardship programs.
The first report on disconnections in Vintoria is expected to be provided to the minister within the next six months.
Ms D’Ambrosio said: “There are a range of factors that have seen an increase in disconnections across Victoria, including cost of energy in Victoria. As reported by the Australian Energy Market Commission last year, Victoria has the highest retail margins compared to any other state in the national electricity market” concerning the effect of carbon tax impact on these disconnections.
“Daniel Andrews must ensure Victorians are treated with respect by energy retailers and not left in the dark, opposition energy spokesman David Southwick said.
“Labour made it harder for Victorians to pay their power bills through the carbon tax and smart meter debacle.”
Many see this new commission as a farce due to the fact that the previous Victorian Coalition Government commissioned a similar review during August 2014.
Government has stated that the former review was more focused on identifying the causes of the disconnections while the new review is looking to identify whether there is a need to change retailers practices and policies, especially regarding the fact that retailers are not doing enough to make sure their clients who are under strain financially are not just disconnected from power.