Struggling with your energy bills? Regulator proposes “game-changing” plan
With energy prices predicted to rise by 35% in 2023, the Australian Energy Regulator's "game-changing" reforms to help vulnerable Australians come at a critical time.
It has already been a massive year for energy consumers who are not only struggling with higher electricity and gas bills but also their cost of living in general.
The average debt of customers on hardship programs is around 30–40% higher as at June 2022 compared to pre-pandemic levels
Australian Energy Regulator (AER) chair Clare Savage says more needs to be done so that people aren't left behind and get the support they need as early as possible.
What reforms is the energy regulator proposing?
There's still a bit to go before the AER brings its new plan to life, but in a nutshell, Towards energy equity: A strategy for an inclusive energy market aims to:
- Tackle energy complexities, innovate and better allocate resources
- Increase protection for consumers
- Improve affordability by reducing retailers' cost to serve customers (especially those experiencing financial hardship)
Good to know. The AER says around 2.7% of residential energy consumers have debt longer than 90 days.
For people at that point, the average debt is $1,000. By the time they get access to a hardship program, that average debt has often grown to more than $1,700.
For a quarter of those customers, their debt is greater than $2,500.
Why are these energy reforms important?
Not everyone is good with tech, knows how to compare, look for the best deals and then make the switch.
And to get someone to do this every 6–12 months to keep their bills down isn't an easy ask either.
"We know that 44% of Australians have literacy levels below what is considered enough to get by in everyday life, 1 in 5 have a disability, and almost half the population will live with mental ill-health issues at some point in their life," Savage said.
I'm not sure I can pay my next energy bill: What options do I have?
If you're having financial difficulties, don't shy away from calling your energy provider straight away.
- It's obliged to have a financial hardship program and offer you assistance. It will then ideally design a support program that's unique to your circumstances. This could include coming up with an instalment plan that'll work best for your budget.
- Ask your energy provider if you're eligible for any rebates or concessions that can help you cut down your energy bills.
- Contact your local energy ombudsman if you need further assistance.
An EnergyAustralia spokesperson said to Finder: "We encourage any customer who might be struggling with their energy bills to reach out to us immediately. We have a variety of support options available, including payment plans, extensions and a stay-connected guarantee."
Wait, energy bills are rising by 35%?
Alinta Energy bosses said at The Australian Financial Review’s Energy and Climate Summit they were predicting a 35% increase in energy prices for 2023.
We reached out to Origin Energy, AGL and EnergyAustralia if they had similar predictions but the 3 biggest retailers in Australia said it was too soon to make comment or predict future prices.
"It's a brave call for anyone to predict future electricity costs that far out with so much going on with households adopting renewable energy products and new investments in larger-scale energy generation and transmission assets," St Vincent de Paul policy and research manager Gavin Dufty told Finder.
"The impact for [Alinta due to its own business] may not be a cost others will be faced with."
So what's the takeaway? Don't get into the hype around 2023 being a bad year for energy. It's too far away and not within your control. Look for easy ways to reduce your energy bills right now by getting the best deal, making changes around your home and using more energy-efficient appliances if you can.
Start comparing energy plans on Finder or check out our picks of the cheapest providers in Australia.
