Until now, hardship programs have been operated by individual electricity retailers around a set of broad principles rather than set guidelines.
But the regulator found that a lack of standardised rules for electricity retailers’ hardship programs meant some customers were not getting the support they needed, prompting the creation of the new safety net.
"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," Ms Conboy said.
AER's hardship review and retailer performance data indicated that discrepancies existed between retailer commitments in hardship policies and what occurred in practice.
“This disconnect can have a significant impact on customers experiencing payment difficulties and their ability to access and successfully complete hardship programs. The purpose of this guideline is to create binding obligations on retailers to strengthen protections for consumers in hardship,” AER said.
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Electricity retailer Energy Locals' chief executive, Adrian Merrick, said these guidelines would help create a set of minimum standards for the industry.
St Vincent de Paul's manager of policy, Gavin Dufty, said while some retailers worked hard to support vulnerable customers, others had dropped the ball.
“We’ve seen a lot of variability from retailers in their support for people in hardship; households had very different outcomes depending on their retailer,” Mr Dufty said. “Some were quite good, some were crap."
He said the new guidelines would give vulnerable customers more certainty about the level of support they could expect.
Electricity and gas retailers say while they agree with the intent of the regulator’s guidelines, they have some concerns about their application and have already made vulnerable customers a focus in 2019.
AGL, which was last year hit with $70,000 in fines from the Victorian regulator for wrongfully disconnecting customers, last month announced a new method using behavioural analytics to identify customer who may enter its hardship programs.
And last week, almost 20 energy companies, including the Big Three retailers – AGL, EnergyAustralia and Origin – collaborated on a new energy charter designed to lift the sector’s accountability and restore trust in the sector. Retailer Alinta was noticeably absent from the charter.
However, in EnergyAustralia and the Australian Energy Council’s submissions about the AER guidelines, they expressed concern about "regulatory creep" beyond the existing rules. Origin’s submission also warned that by standardising hardship guidelines, it removed the retailer’s flexibility to respond to specific customer circumstances.
The new rules for the national electricity market, encompassing NSW, Queensland, the ACT, Tasmania and South Australia, are slated for implementation in April. Victoria has its own energy regulator.
Covering energy and policy at Fairfax Media.