Open Letter to Energy Retailers: Bills Relief during COVID-19 Pandemic

1 July 2020 Updates

We received the following responses from energy retailers:

• From Origin Energy: http://tiny.cc/hb3ppz
• From AGL: http://tiny.cc/n92ppz
• From Alinta Energy: http://tiny.cc/4zcupz
• From Red Energy (1 July update): http://tiny.cc/46amrz
• Clarification letter from Origin Energy (1 July update): http://tiny.cc/o7amrz

For a full analysis and report of the Response of Energy Retailers, see here: https://www.sydneyalliance.org.au/bills_relief_responses

To the CEOs of Energy Retailers,

12 May 2020

We, the undersigned, representing diverse constituents across Sydney and NSW, write this open letter calling on energy retailers to be proactive in providing assistance to customers experiencing financial stress due to the disruptions caused by the COVID-19 pandemic.

On Monday 23 March 2020, the Sydney Alliance Council discussed the need to ensure all energy customers in financial stress can access payment support and other forms of assistance via their retailers. The Sydney Alliance Council endorsed the following asks of energy retailers, to help guarantee energy for all, namely:

1. No disconnections. Companies should continue to offer their services without interruption.
2. Pause debt collection proceedings. People should not be hassled by debt collectors during this time.
3. Waive penalty and late fees, including additional interest charges. No one should pay extra if they are struggling to pay bills on time.

This endorsement affirms and supports the policy recommendations already made by energy consumer advocates and community organisations, including the Public Interest Advocacy Centre and the Consumer Law Action Centre.

We welcome the expectations set by the Australian Energy Regulator for energy businesses. We also recognise that some energy companies have issued statements outlining how they will support customers experiencing financial stress during this time.

This pandemic is not business as usual. The response that should be forthcoming from retailers is not a slight re-working of existing frameworks for support. Rather, far more proactive measures are needed to protect energy customers and to avoid the accumulation of unmanageable debt.

People who are staying at home do so to protect our communities. The cost of these actions, which benefit us all, should not be borne by individuals and families who are already struggling to make ends meet.

Energy is an essential service. Energy companies that are signatories to the Energy Charter have pledged to put customers at the centre of their work, and to address community expectations.

COVID-19 and Wide-Ranging Economic Disruptions          

The disruptions caused by COVID-19 pandemic are having unprecedented and wide-reaching impacts on everyday people. An estimated 1 million people are set to lose their jobs in the coming months. Currently, many of our members are accessing Centrelink for the first time and worrying about how to afford rent, groceries, and medicine.

Community restrictions regarding social distancing mean that many people are spending significantly more time at home. In coming weeks and months, they will see their energy bills increase at a time when they have a much lower capacity to pay.

While energy bills are not yet front of mind, we wait with trepidation the impact the next quarter’s energy bills will have on our members, and particularly on those experiencing other forms of disadvantage, many of which have been brought into stark relief during this pandemic.

Without support and relief, we fear members of our communities will be left burdened by debt and will risk being trapped in compounding cycles of financial hardship.

Furthermore, the scale of economic disruptions mean that time is required before Australia will recover. Vulnerable customers will need time and support to get back on their feet.

Universal access to payment support and other forms of assistance

We recognise energy retailers have existing programs designed to support vulnerable customers. We also understand that while on hardship programs, customers have access to a range of supports and protections, including a commitment to no disconnections.

However, access to such support is not straightforward and is heavily reliant on the customer’s own advocacy. This is problematic because:

• Research shows many people are unaware of their entitlement to support during times of difficulty.
• Access issues, including technology and language barriers, prevent many people from reaching out for assistance. These issues are particularly acute in some communities, and in many rural and regional locations.
• Reactions to financial stress will be varied and may include denial, shame, anger, and depression. These reactions mean many people will not reach out for support before entering crisis.

Furthermore, eligibility restrictions will see many customers experiencing financial stress fall through the cracks during the pandemic.

We are facing an unprecedented crisis, where families who have never worried about paying a bill are facing this difficult question for the first time. We call on energy retailers to take proactive steps to ensure that no one is left behind during the crisis.

Call to Action

We are calling on all energy retailers to:

1. ensure payment support and other forms of assistance are open to any customer having trouble paying their bills;
2. confirm unequivocally that no customers will be disconnected without their agreement during the COVID-19 pandemic till at least 31 July 2020;
3. pause debt collection proceedings until at least 31 July;
4. waive penalty and late fees, including additional interest charges; and
5. communicate clearly the forms of assistance available to their customers, simplify the processes required to access assistance, and put in place proactive measures to reach out to people who are late with their payments.

We will be keeping track of energy retailer’s commitments and publishing responses to our membership.

Signed,

Signatories as at 12 May 2020.