WA retailers report record debt for customers

The Economic Regulatory Authority of Western Australia (ERAWA) has released two annual data reports demonstrating the impact of cost of living pressures on energy customers, with high inflation and rising interest rates affecting electricity and gas affordability, leading to record debt for some customers.

The ERAWA has published two annual data reports showing the latest trends in energy retailers and distributors’ performance since 2016.

Retailers report that 2021/22 COVID-19 pandemic support measures continued to impact residential customer experiences.

These measures included electricity and gas suppliers temporarily stopping the disconnections and an electricity credit of $600 in November 2020 and an additional electricity credit of $400 in July 2022 for residential customers.

The number of struggling electricity customers has since returned to levels seen before pandemic relief measures and the number of struggling gas customers is the highest ever reported.

This increase appears due to the debt incurred by some customers while the pause in electricity and gas disconnections was in place. However, most hardship customers have been successful in completing their repayment plan.

Despite state government support measures, the average residential bill debt for non-stressed customers has increased for both electricity and gas retailers.

On June 30, 2022, Synergy customers’ average debt reached $766, the highest level in six years, and Horizon Power customers’ average debt reached $974. Average account debt for customers in hardship programs also remained higher than pre-pandemic levels.

In addition to reporting this data, ERAWA has sought to support customers who are having trouble paying their electricity bill by introducing new protections in the Code of Conduct for the supply of electricity to small-use customers.

These changes will require retailers to provide payment management assistance to all customers who request it, establish an account balance of $300 before a residential customer can be disconnected, and provide specific assistance and protection to customers experiencing domestic and family violence. This protection will commence on 20 February 2023.

Steve Edwell, chairman of the ERAWA, said: “The data points to increasing cost-of-living pressures on energy customers. Despite the pandemic-related customer protection measures, the subsequent high inflation and rising interest rates are affecting the affordability of electricity and gas services.

“Given these macroeconomic circumstances, the ERAWA encourages retailers to maintain their focus on flexible payment arrangements and hardship support schemes to ensure customers can continue to access energy as an essential service.”

Distributors’ performance reporting obligations apply only to distributors serving small-use customers, which are residential and small business customers that consume less than 160 megawatt-hours of electricity or one terajoule of gas per year.

It consists of Western Power, Horizon Power, Rottnest Island Authority and Peel Renewable Energy for electricity, and ATCO Gas Australia, Wesfarmers Kleenheat Gas and Esperance Power Station for gas.

Western Power’s reliability performance weakened in 2021/22 compared to the previous year. Overall, there was a seven percent increase in customers experiencing prolonged outages (longer than 12 hours).

There was a threefold increase in Perth and urban customers experiencing more than nine outages in the year and a ninefold increase in rural customers experiencing more than 16 outages.

Poor levels of service in some parts of Western Power’s network are a particular focus area in the ERAWA’s review of Western Power’s next access arrangement, which runs until 2027.

Other energy distributors generally met reliability standards; Horizon Power met the outage duration standard for the fourth consecutive year and only one percent of Horizon Power customers experienced a prolonged outage (longer than 12 hours).

The gas distribution networks have consistently high reliability, with less than 0.1 per cent of ATCO’s customers and none of Kleenheat or Esperance Power Station customers experiencing an outage in the reporting period.

Mr Edwell said: “We know that poor levels of reliability in some parts of Western Power’s network are significantly affecting customers.

“We are currently reviewing Western Power’s access arrangement, with a focus on improving reliability performance.”