A report released by St Vincent de Paul Society today highlights the need for a flexible support framework when it comes to customers experiencing energy hardship.
The authors analysed disconnection data from AGL from the period July 2012 to July 2015 to get a better picture of what the underlying drivers of disconnection may be. The authors found that underlying cost of living pressures and insufficient income were the overriding factors in all four states. AGL partners with community organisations undertaking this sort of research to assist all sectors - government, industry and the community sector improve policy and program design.
AGL supports many of the report recommendations, in particular a review of the energy concessions framework. Last year, AGL chaired a cross-sectoral industry and community sector review of energy concessions around Australia, with the group finding that in several states customers would benefit from a shift to a flexible or percentage-based approach.
One of the defining features of customers participating on AGL's hardship program is that they consume around 40% more energy annually, when compared to our average customer base. We think this may due to a wide range of factors such as time spent in the home, poor building fabric, cheap appliance use and limited availability of funds to make energy saving investments in solar PV or new heaters. This is the subject of ongoing research with our community partners who provide home energy visits to customers on our hardship program.
To improve the available support network, AGL believes that industry, government and the community sector needs to work together to deliver:
- Reform of the energy concessions framework, having regards to eligibility (means or needs tested), adequacy (flexible and percentage-based) and improved access (easy access and simplified application processes for consumers);
- Co-investment programs across energy retailers and government to target energy savings technologies such as solar PV to low-income, high consumption households of customers participating on retailer hardship programs;
- Introduction of minimum standards for tenanted properties to ensure that vulnerable consumers aren't trapped living in properties which are causing very high consumption;
- Increased cross-sectoral community outreach to raise awareness in disadvantaged communities about the support available - it's sometimes not well known for example, that all energy retailers have hardship programs and flexible payment arrangements available for customers struggling to pay bills.
AGL is investing $6.5 million in an Affordability Initiative which targets debt relief, matching payments, funding of financial counsellors, along with partnerships to deliver solar PV to customers participating on its hardship program. It's this integrated approach and strengthening of the support net across the industry and community sector which we believe will be the most effective in reducing debt accrual and wherever possible, avoiding disconnection.