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Victorian energy disconnections rise as pandemic rages on

4 min read
5 Jul 2021
Couple has energy disconnected in victoria

A new report from Victoria’s Essential Services Commission (ESC) reveals that an alarming number of Victorians are having their gas and electricity disconnected during the COVID-19 pandemic – despite the ESC warning energy retailers not to disconnect customers who have contacted them about support or debt. The report also shows energy debt is continuing to grow across the state.

Victoria has been plunged into several lockdowns since the beginning of the COVID-19 pandemic in 2020, with many people struggling to pay their gas and electricity bills. Disconnections for non-payment were put on a temporary hold for most of 2020 but were able to resume from December 2020.

The ESC’s Victorian Energy Market Update Report for June 2021 found that there were 2,034 residential electricity disconnections and 272 residential gas disconnections in March 2021 due to non-payment – the highest figure since April 2020.1 For electricity, in particular, this exceeds 2019’s monthly average of 1,820 disconnections.

Due to these increasing figures and the fact that Victoria entered a further lockdown in February, the ESC advised retailers to pause disconnections for customers who contacted them about accessing support or debt worries. However, voluntary data provided to the ESC by energy retailers found that monthly disconnections have continued at similar levels in April and May 2021.

April saw 1,745 electricity disconnections and 370 gas disconnections due to non-payment across the state.1 Meanwhile, 1,739 people had their electricity disconnected in May and residential gas disconnections jumped to 833.1

Despite the increase, disconnections for non-payments are actually returning to pre-pandemic levels.

Monthly electricity disconnection average 2019Electricity disconnection May 2021
1,8201,739
Monthly gas disconnection average 2019Gas disconnection May 2021
922833

Source: Essential Services Commission – ‘Victoria Energy Market Update June 2021’ – Accessed 30/06/2021

Energy Expert and General Manager of Utilities at Compare the Market, Brett Mifsud, said that while energy can be disconnected if you don’t pay your bill, it’s essential to have a chat with your retailer if you’re struggling to pay bills or you’re under financial stress, so you don’t put yourself at a higher risk of disconnection.

“The ESC has informed energy retailers not to disconnect customers who have contacted them about an energy debt or to access support, so starting a conversation with your retailer is essential,” he said.

“Around one in five Victorian households requested financial assistance with their gas and electricity bills over the past year due to the pandemic,2 so there’s often things that can be done so your power isn’t disconnected.”

“Retailers themselves may be able to offer you payment plans, bill smoothing or flexible repayment options if you’ve fallen on hard times.”

Eligible low-income Victorians who are struggling to pay overdue energy bills can apply for the Utility Relief Grant Scheme (URGS) to receive relief grants to help cover bills.3  There are other concessions available for valid concession card holders, including the one-off $250 power-saving bonus for eligible Victorians.4 This includes pensioners, Veterans, and recipients of JobSeeeker, Austudy and Youth Allowance payments.

The report also shows that as of March 2021, 46,388 residential gas and 63,323 residential electricity customers were receiving tailored assistance from retailers to pay bills.1 And, compared to pre-pandemic rates, the average electricity debt has grown by 14% to $1,119 and the average gas debt has seen a six per cent increase to $820.1

Average electricity debt 2019Average electricity debt March 2021
$979$1,119
Average gas debt 2019Average gas debt March 2021
$776$820

Source: Essential Services Commission – ‘Victoria Energy Market Update June 2021’ – Accessed 30/06/2021

While owing money for gas and electricity bills is never ideal, Mifsud explained that Victorians might be able to reduce energy bills by ensuring they’re on the best plan and rates possible.

“The latest ESC report shows that an estimated two million Victorians could be paying more than they need to for energy and gas because they’re not on the best deal,1” he said.

“At least three times a year, retailers must display whether you’re on the best plan on your energy bill. If you haven’t changed providers or plans in more than a year, there’s a good chance you could be paying more than you need to and you might benefit by switching.”

The Executive Director of Energy at the ESC, Sarah Sheppard, added that the commission is also working with retailers, so Victorians continue to receive support when they need it.

“We are running workshops for industry on debt-collection and will continue to closely monitor whether businesses are following the energy rules by providing protections for customers in payment difficulty,” she said in a statement.5

If you want to look for a better energy plan or want to see what else is available, we’re here to help. Our free energy comparison tool allows you compare options for a range of providers, plans and features in minutes.

Sources

  1. Essential Services Commission – ‘Victoria Energy Market Update June 2021’ – Accessed 30/06/2021
  2. Energy Australia – ‘Government Assistance’ – Accessed 30/06/2021
  3. Victoria State Government Health and Human Services – ‘Utility relief grant scheme’ – Accessed 30/06/2021
  4. Victoria State Government Health and Human Services – ‘Victoria’s Household Energy Savings Package’ – Accessed 30/06/2021
  5. Essential Services Commission – ‘Media release: Report reveals about two million Victorian households are paying higher energy bills than they should’ – Accessed 30/06/2021
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avatar of author: Phillip Portman

Written by Phillip Portman

When he’s not busy writing, Phillip can usually be found at the movies, riding rollercoasters at theme parks, hanging out with his cockatiel Tiki, or talking about everything pop culture. He has a Bachelor of Arts in Communication and Journalism and has previously written about health, entertainment, and lifestyle for various publications. Phillip loves to help others and hopes that people learn something new from his articles.

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