EnergyAustralia expands hardship program as retailers prepare price hikes
Sydney Morning Herald
June 8 2017
Energy retailers are expanding their hardship programs, acutely aware their soon-to-be-announced price hikes – speculated to be as much as 30 per cent – could tip more households over the edge.
EnergyAustralia has committed to a one-off $10 million injection into its hardship program, which usually runs at $1.5 million each year, saying that prices won't be easing and it needed to be prepared to help customers through the "difficult times" ahead.
While she couldn't talk specifics about the upcoming price hikes, managing director Catherine Tanna said it had to pass on the ballooning wholesale electricity costs.
"It's very complex, but wholesale prices have roughly doubled in the past year and they make up 25 per cent of the customers' energy bill, and it's one big reason, but there are many," she said.
She said the energy system, "with lights going out and prices going up", was not working as intended and that strengthening its hardship program was the first step in helping the most vulnerable.
"Our most vulnerable customers will need particular support, so it's about working with experts to put them in a more sustainable position, as we don't know with any certainty how long they will need help," she said.
Retailers in NSW and South Australia are rumoured to be preparing price hikes of up to 30 per cent, the Australian Financial Review reported, following the ACT Independent Competition and Regulatory Commission's announcement on Wednesday that average retail electricity prices in its market would rise by almost 20 per cent in July.
ActewAGL chief Michael Costello described the hikes as "unprecedented" and blamed them on "10 years of uncertainty in national energy policy".
Electricity bills are going through the roof across the country, reflecting higher wholesale costs, the closure of large coal-fired power stations, including Hazelwood in Victoria, and growing demand for gas by LNG projects in Queensland, as well as reliability issues with some big generators.
Based on the average annual electricity bill of $2200 for a household on the Ausgrid network, NSW families could end up paying up to $660 more next financial year.
St Vincent de Paul's Gavin Dufty warned families should "hold onto their seats and get ready for a bumpy ride" because, based on wholesale futures, "there doesn't seem to be much relief for at least 1.5 to 2 years".
"EnergyAustralia's announcement indicates to me that it's forecasting poorer cash flow, meaning people will be paying later because they're struggling, and forecasting a greater number of people being in severe energy distress and needing intense support," he said.
"Ultimately, this means there will be more disconnections and people will be going without this essential service."
He urged state government to adjust its concession frameworks and add "shock absorbers" to match the significant price increases.
"It's time for NSW to move to percentage-based concessions so that they automatically adjust, like we have in Victoria," he said.
NSW Energy Minister Don Harwin said he was concerned by households and businesses facing bill rises mid-year and reminded consumers of the rebate schemes and the recently expanded Energy Accounts Payment Assistance scheme available.
"We added a further 30 community welfare organisations that offer $50 EAPA vouchers to help struggling customers pay their gas or electricity bills," he said.
Mr Harwin said he was working with state and federal counterparts to achieve energy market reform through the Finkel Review, to be released on Friday.
"We are also currently finalising the largest energy efficiency package in the country, which could save consumers $17 billion by 2050, and put downward pressure on prices," he said.
"Our Draft Plan to Save NSW Energy and Money includes new measures to provide more efficient appliances, and other retrofits for homes and businesses."
There were 24,921 electricity customers on hardship programs in NSW between January and March this year, up 36 per cent on the June 2014 quarter figure, according to the Australian Energy Regulator.
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