Like millions of people in Australia's eastern states, Bill Grimes shivered through a relatively cold winter this year.
Key points:
- The Australian Energy Regulator has called for a major shake-up of protections for energy consumers
- It is proposing to broad the definition of vulnerability and require retailers to reach out sooner to prevent disconnection
- The call comes amid rocketing benchmark electricity prices, which have risen by as much as 20 per cent this year
Often, he said, the only thing that stood between him and misery was an electric heater.
"This year … was bloody cold," Mr Grimes said.
"Everyone was complaining how cold it was."
The 54-year-old disability pensioner reckons his is a common story where he lives at Newcastle, north of Sydney.
He said that reliance on his electric heater pushed up his power bills and ate into his budget of about $500 a week.
Amid warnings that electricity prices could jump a further 35 per cent next year, he's worried about what's coming down the pike.
"I've been coping all right but wondering just how, in my situation, it's going to be in 12 months' time, or whenever electricity prices do take a jump," he said.
"If these prices are going to skyrocket like that it's just going to make things really uncomfortable … when you've got to sort of think, 'What do I have to sacrifice to pay my power bill?'
"Because the last thing you want is to be bloody cut off."
Calls for help often too late
The plight of vulnerable consumers such as Mr Grimes is at the forefront of a new report from the Australian Energy Regulator (AER).
In the report the watchdog notes that debt levels among energy users are increasing, as are the number of customers in hardship.
AER chair Clare Savage said too many customers were being disconnected for not paying their bills.
"By the time those customers are identified by an energy retailer as needing hardship support … they have usually got about $1,700 a debt," she said.
"A quarter of those customers actually have debt that's about $2,500.
"So I'm pretty sure you can imagine, if you had $5 or $10 spare a week, coming back from $1,500, $1,700, $2,500 of debt is almost impossible."
Ms Savage says wholesale reforms are needed to the protections for energy consumers.
She said vulnerable customers needed to be identified earlier to stop them from falling into a cycle of debt and that higher thresholds before they could be disconnected should be introduced.
Ms Savage also says the definition of "vulnerable" needs to be widened to include groups such as victims of domestic violence, people with mental health problems, and those who struggle with literacy.
She said the AER was also considering whether electricity networks and generators – not just retailers – should help to meet the costs of supporting those in need.
Experiences 'consistently poor'
Despite this, Ms Savage stopped short of calling for increased subsidies, saying that was a matter for state and federal governments to decide.
"One of the challenges we would see is that we have designed a system that assumed people's vulnerability would be addressed elsewhere," she said.
"We assumed they would have enough income because of the welfare transfer system.
"What we've seen is it's actually complex, it's hard to engage with.
"People find it hard to shop around for the best deal, they may not understand the material that's put in front of them and therefore we may not get the outcomes we expected."
St Vincent de Paul policy and research manager Gavin Dufty said the AER's strategy was a good start but reforms needed to go much further.
He said the "piecemeal" approach to energy subsidies and concessions across jurisdictions was letting consumers down and needed to be better coordinated.
Mr Dufty also called for an overall increase to subsidies, saying many consumers would be hit hard by skyrocketing prices for electricity and gas.
"We need to ensure they're targeted to the right people and the amounts are adequate," he said.
"We can't be silent on that."
Mr Dufty also stressed the need for fairness as Australia shifts from fossil fuels towards renewable energy sources.
Transition 'must be equitable'
Mr Dufty said that too often poorer households were helping to foot the bill for the uptake of technologies such as rooftop solar panels while missing out on most of the benefits.
"With the energy transition, we need to review how government programs are funded, often through energy bills which end up putting additional burdens on those who can least afford it," he said.
"So making sure we have got a fair and equitable transition is critical here.
"Unfortunately, we have been baking in a lot of those costs to people who literally cannot afford them."
The Australian Energy Council, which represents major gas and electricity retailers, cautiously welcomed the AER's report.
Chief executive Sarah McNamara said the industry broadly supported the regulator's proposals, but it wanted to see more detail.
She said widening the definition of vulnerability would undoubtedly "capture more customers".
But Ms McNamara said retailers wanted to engage with customers who might be struggling as early as possible.
"The real challenge for retailers is not so much the definition of vulnerable customers," she said.
"It's understanding the best ways to encourage those customers to be in touch with their retailer."
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