Victorian household energy debt higher despite recovering economy

Household energy debt continues to grow for many Victorians as new data from the state’s independent economic regulator announced a 35 per cent increase in debt since April 2020. 

Despite a recovering economy, Victorian customers are still feeling the pinch of the pandemic through their electricity and gas bills, with reports of more than $103 million being owed to energy providers.

Essential Services Commission (ESC) chair Kate Symons said the number of customers requiring payment assistance with their bills is at its highest since the start of the pandemic. 

“What is really worrying is that most of the indicators of harm are pointing in the wrong direction. While broad economic conditions have improved, more than 55,000 residential customers are receiving payment assistance and the number of disconnections is on the rise,” she said.

Not only has debt risen sharply over this time period, but also the number of households being disconnected for non-payment. 

“This shows the pain is intensifying for those who are in financial difficulty and I’m concerned some sections of the community are getting left behind,” said Ms Symons. 

Disconnections are usually a last resort for retailers, and under National Energy Retail Law, can only take place once a series of steps have been followed. 

Canstar Blue Energy Editor Jared Mullane said switching off the power shouldn’t be the first port of call if a bill payment is missed, and retailers have processes in place to protect financially vulnerable customers.

“Your provider should have contingency plans if customers are experiencing financial hardship. It’s their responsibility as a provider to ensure all possible financial support avenues are explored before switching off your electricity,” he said.

Mr Mullane said while exploring the financial support of your provider is the first course of action, customers could also compare prices to ensure they are receiving the right plan for their household. 

“Don’t be afraid to compare prices when looking for the best electricity deals. 

“If you’ve been with the same electricity provider for a while, then perhaps it’s a timely reminder to review your last bill as the prices you paid when signing up could have changed dramatically since then. Everybody consumes energy differently, so it’s just about finding what works best for you and your budget.” 

Struggling Victorians encouraged to contact their energy provider

Energy hardship policies are set and enforced by the Australian Energy Regulator to protect vulnerable Australians from being cut off by their energy provider. 

Your provider is required to provide a copy of this policy, usually found on their website, which should explain the process, payment options, programs and assistance they provide in these circumstances.

In addition to this, providers should also make struggling customers aware of their missed payments and provide a disconnection notice before resorting to turning off the power. 

If you have concerns with paying your bills, contact your energy provider and ask to discuss what concessions, grants or payment plans may be available to you. 

Image credit: Andrey Bayda/Shutterstock.com

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