Financial hardship to blame for Australian’s electricity disconnections

Peter Terlato 9 June 2016

bill electricity

Rural NSW and suburbs on the fringes of state capitals were the worst hit.

While energy prices continue to increase there aren't strong links between higher bills and electricity disconnections, but socially disadvantaged communities are more likely to suffer, according to a new report.

St Vincent de Paul Society, using data from AGL, commissioned a project which analysed and mapped out around 200,000 electricity disconnections as a result of non-payment in NSW, Victoria, South Australia and south east Queensland over a three year period between July 2012 and July 2015.

The report focused on the top 50 postcodes in each state which experienced these types of disconnections. The data was correlated with Australian Bureau of Statistics (ABS) financial demographics information to paint a picture of the types of households experiencing these disruptions.

NSW was responsible for the highest proportion of disconnections over the three-year period, tallying 78,071 cuts or 39%. Victoria followed closely with 63,600 (32%) disconnections, while South Australia experienced 34,680 (17%) and south east Queensland 23,353 (12%).

The areas that experienced the greatest number of disconnections were towns in rural NSW and suburbs on the fringes of Melbourne, Brisbane and Adelaide.

Here's a state-by-state breakdown of the most common reasons for disconnections.

NSW

The majority (33 out of 50 postcodes) of disconnections occurred in rural and regional areas, among low to median income families and households (couples, sole persons and sole parents) with lower housing costs but greater transport costs. This doesn't necessarily mean similar households and families in Sydney weren't at risk; there were simply higher disconnection rates outside of the capital.

Victoria

There was a relatively even distribution of disconnections among low income, median income and low to median income families and households experiencing housing stress or lower housing costs but greater transport costs.

South Australia

The groups that experienced the highest disconnection levels were families enduring housing stress as well as smaller households either experiencing housing stress or located in rural and regional areas of the state, where housing is less expensive but transport costs are greater and incomes lower.

South east Queensland

This was a smaller and more densely populated sample zone. Low income and median income families, as well as low income households, experiencing housing stress were most at risk of non-payment disconnections.

Households in Victoria and NSW experienced the largest number of multiple disconnections. In Victoria there was a strong link between the roll out of smart meters - which enable providers to disconnect customers remotely - and a rise in the disconnection completion rate, according to the report.

The table below outlines rural and regional postcodes where 200 or more customers were disconnected twice over the three years.

StatePostcode NameNumber of customers
NSWOrange477
NSWDubbo338
VICCorio329
NSWWagga Wagga285
NSWBathurst269
VICShepparton243
VICBallarat241
VICMorwell240
NSWBroken Hill238
VICWarrnambool236
VICBendigo221
NSWTabletop208
SEQBellmere207
NSWLavington200
NSWMoree200

Together, the regional NSW towns of Orange and Dubbo had more than 800 customers that experienced two disconnections over the three year period. 329 customers from the Victorian suburb Corio, located in Geelong, were also disconnected twice.

Melbourne and Sydney also recorded high numbers of customers who experienced two disconnections. Victorian suburbs dominated the top-end of this list, as can be seen in the table below.

StatePostcode NameNumber of customers
VICWerribee571
VICSt Albans414
VICTarneit379
VICMelbourne375
VICSydenham357
VICSunshine350
VICCranbourne East320
VICBurnside300
NSWMount Pritchard260
NSWHebersham256
VICMelton221

If you're struggling to cover the cost of your energy bill you can work out a payment plan with your electricity company before debt collectors begin calling about missed payments.

If you're looking at switching energy providers and want to compare plans and save money, check out our in-depth guide. We've also got tips on how to properly read your electricity bill and the tariffs and fees you encounter.

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