The ongoing challenges of COVID-19 - and most recently the hard lock down in Melbourne and restrictions more broadly in Victoria - have brought the economic stress on households to the fore.
The Australian Energy Council supported by its retail members has launched a campaign, “Helping You Stay on Track” to alert energy customers to the support available if they are experiencing hardship.
Being at the front line, retailers manage the customer experience of residential and business customers and are playing a key role in the response to the economic impacts of the pandemic. A role that is likely to continue for some time.
As providers of essential services, energy businesses – generators, retailers, and networks – understand their responsibility to deliver for Australian homes and businesses. But understanding how energy businesses work can be complex.
Research is increasingly showing financial concern growing due to the pandemic. One ongoing challenge is to ensure that customers are aware of the support that is available from their energy retailer, particularly for many households who may not have previously sought support. That possibility is now being thrown up by the current economic and health challenge.
The campaign is based around simple messaging via social media, fact sheets and other materials.
“Helping You Stay On Track” aims to alert households that may experience financial challenges as a result of the COVID pandemic, and that they can approach their retailer for a confidential discussion.
The industry is working with various community groups and local government to disseminate the information, which has been translated into 11 languages, to spread the message as broadly as possible.
Recent research by different groups has pointed to household concern about their financial wellbeing stemming from the pandemic. An assessment in June found:
Consumers reported most concern about their ability to pay rent (37 per cent), mortgages (27 per cent), energy bills (27 per cent), followed by insurance (25 per cent), credit (22 per cent), groceries (25 per cent), and telecommunications (20 per cent).
A separate survey of 1000 energy customers recently conducted by Essential Research for Energy Consumers Australia (ECA)[ii], showed 20 per cent of electricity bill payers had already contacted their retailer for help. While 10 per cent of customers had contacted their retailer and sought assistance, 32 per cent of those who have lost work due to COVID expected to need help, but had not yet reached out.
Source: Essential Research
However, what is not clear is the percentage of customers choosing not to engage at all with their retailer, or the percentage who may not be aware of the support available by contacting their retailer.
While retailers provide information to customers, assessments indicate that many households cannot remember the last time they received information from their retailer. One potential factor is that energy is classed as a ‘low involvement category’ with electricity consumption spontaneous. And the majority of consumers won’t consider or seek support - until their circumstances change.
For example, the Essential Research shows that those who have lost work or hours are more likely to recall receiving information from their service providers. The ECA found that most household consumers under financial pressure can recall hardship information provided by their energy supplier. Household consumers in the ‘working from home group’ were less likely to recall information sent by their retailer about COVID related support that was available[iii].
Source: Essential Research
Range of measures
Retailers offer a range of assistance measures to all customers on request – a key message that is reiterated through the “Helping You Stay On Track” campaign. Assistance measures will differ between retailers, but include:
There are also a wide range of concessions and emergency relief measures available for customers receiving JobSeeker and other government payments. Retailers will help customers to access these rebates.
There are currently around 88,000 electricity customers on payment plans in New South Wales, South Australia, Queensland, the ACT and Tasmania. A further 82,000 are on hardship plans, while an additional 35,000 have had payments deferred. In Victoria there are 48,000 customers receiving assistance from their energy retailer, with 9,000 having their payments deferred.
The “Helping You Stay On Track” campaign was launched this week to encourage engagement by customers with their retailer, and is intended to provide, simple, practical information to a broad range of customers who might be having payment issues or may be expecting to run into issues.
[ii] Energy Consumers Australia - Shock to the System: energy consumers' experience of the COVID-19 crisis.
During the height of COVID-19, Australian retailers were concerned that the impacts of government interventions might unintentionally impact the ability of retailers to meet their upstream obligations. The impacts on retailers of providing additional protections – on top of the already notable consumer protections in place - and the longer-term debt implications for customers remained a concern.
A perennial discussion in energy market policy is the contest between what we are ultimately trying to achieve: “customer benefits” or “market benefits”. When making market rules, or building monopoly assets, rules require that we assess “net market” benefits. A number of recent government policies have been justified on customer benefit assessments alone.
The economics of traditional plants are well understood, but since their construction, the way they need to operate has changed substantially. This has been driven by a combination of the age of the plants as well as the large influx of renewables, which is changing the supply and demand patterns of the grid.
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