AER launches statement of expectation of energy businesses

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Today the Australian Energy Regulator (AER) is calling on energy businesses to put customers first during the current global health crisis.

Launching the Statement of Expectations of energy businesses: Protecting consumers and the energy market during COVID-19 the AER has reiterated that energy is an essential service and that the energy market has an important role to play in protecting and supporting businesses and the community through the COVID-19 pandemic and our recovery.

Key AER expectations include:

  • that energy retailers offer payment plans or hardship arrangements to all residential and small business customers who indicate they may be in financial stress, regardless of whether the customer meets the ‘usual’ criteria for that assistance;
  • no disconnection of any residential or small business customers who may be in financial stress (without their agreement) before 31 July 2020 and potentially beyond; 
  • deferring referrals of customers to debt collection agencies for recovery actions, or credit default listing until at least 31 July 2020; and
  • waiving disconnection, reconnection and/or contract break fees for small businesses that have ceased operation, along with daily supply charges to retailers, during any period of disconnection until at least 31 July 2020.

AER Chair Clare Savage said that energy retailers are expected to act according to the magnitude of a crisis that has already created significant unemployment and loss of income for consumers.

Related article: A comprehensive guide to the Australian energy industry and COVID-19

“We understand the significant impact the COVID-19 pandemic is having on the Australian community and our stakeholders,” she said.

“Many people are or will be affected by dramatic changes to their lives, businesses, income and working arrangements, and those of their friends, families and communities. As a result their energy use and ability to pay their bills could be affected.”

Ms Savage said that energy businesses operate as part of the community, and bear the weight of community expectations.

“People enter into a contract when they sign up with an energy retailer. But businesses also have a deal, a social contract, with the community in which they operate. At a time like this, it is vital they remember their broader social obligations,” she said.

“When people have lost their jobs or business through no fault of their own, it is only fair to expect that they be given any and all help possible, and that includes from their energy providers.

“We are pleased to see a number of businesses have already made announcements indicating they will be meeting these expectations, but we will be monitoring the whole market to ensure all customers are properly protected.

Related article: COVID-19: Ministers to safeguard energy

“The AER is not calling for an amnesty on bill payments and encourages those Australians who can to pay their bills on time to continue to do so.

“This is vital to ensuring the ongoing viability of energy businesses. However, we also recognise that the circumstances arising from this pandemic mean more customers may find it difficult, or impossible, to pay their bills at the moment.

“If you are a residential or small business customer concerned you may have trouble paying your bill, get in touch with your retailer immediately and seek their support.

“This does not necessarily mean ringing a call centre, as many retailers offer payment assistance options like extensions to due dates through their websites.”

The AER also recognises the need to focus on emerging issues of critical importance to the energy industry, and to residential and small business customers who are facing a range of difficulties.

“We will work with market participants to address concerns and will, where appropriate, consider a more flexible approach to ensure market participants can continue to operate in the long-term interests of end users,” Ms Savage said.

During this crisis, the AER will be prioritising the safety and reliability of energy supply, ensuring retailers meet the needs of customers in vulnerable circumstances and protecting customers who may be unable to safeguard their own interests.