Bill shock: Record number of households on electricity hardship programs
A record number of households are being forced onto hardship programs to pay off their electricity bills as they struggle to cope with rising power prices.
The Australian Energy Regulator's (AER) latest electricity retailer report shows 80,437 households sought help with their bills as at March 31, up 17 per cent from 68,832 in 2017-18.
"This [increase in hardship figures] may be positive as customers who would otherwise be unable to pay gain extra assistance, however, it is a significant increase in the number of people requiring assistance, suggesting that more people are struggling to pay their bills," the AER said.
Bills have been spiking to record levels following the closure of the Hazelwood coal-fired power plant in Victoria's Latrobe Valley in 2017, which took a major source of energy out of the grid.
The Australian Energy Market Commission has forecast average annual power bills of $1294 for NSW in 2018-19 and $1375 for Queensland households, while Victorians are forecast to have average power bills of $1096 for 2019.
The average level of energy debt for households on the east coast - excluding Victoria - has nearly doubled in the past four years, from $575 in 2013-14 to $1004 in 2017-18. The average level of debt for those entering hardship programs in the March quarter was $1146.
Hardship programs are repayment plans run by retailers designed to support households that are unable to pay their power bills on time. They are used instead of disconnecting their electricity.
However, only one in four households under the AER's jurisdiction - which includes NSW, Queensland, South Australia, the ACT and Tasmania - are successfully completing the hardship programs. This is still an improvement on the 21 per cent completing the programs last year.
Victoria is not included as it has its own energy regulator.
St Vincent de Paul's policy and research manager, Gavin Dufty, said these programs could help households get back on track and cut energy debts.
"We're seeing more people struggling to pay their bills due to the rising price of electricity," Mr Dufty said.
"While it's great more people are getting help, for some, getting into a hardship program is just delaying the inevitable [disconnection]."
The AER has been pushing households to enter their retailer's hardship programs as energy debt levels rise, rolling out a new safety net to create a minimum standard to protect struggling customers.
"We know that more people are going into these [hardship] programs, but fewer people are successfully completing them. This is why the AER is doing more work in this area to establish a 'hardship guideline' to further strengthen the protections available to consumers," AER chairman Paula Conboy has previously said.
Tasmanians have the highest level of hardship debt for the year to date, at $1605. South Australia, which has the highest electricity bills in the country, had an average debt of $1548.
The AER said Tasmania had a higher rate of electricity hardship debt as households in the state had less gas compared to other states, so had to spend more on electricity.
The regulator has also been penalising retailers that fail to support their customers.
In November 2017, it fined Origin $40,000 for disconnecting a customer without first entering them in Origin's hardship program.
Despite the increase in households joining hardship program, disconnections have still been rising, hitting a peak of 72,100 in 2017-18. About 15,270 households were disconnected in the second quarter of 2018-19.