High debt levels

Large debts continue to accumulate

In the current environment of high living costs, many people have to choose between essentials like heating their homes or buying food. If customers are unable to pay their bills in full, accumulating debt becomes a looming issue and can lead to further problems such as disconnection or credit listing. 

This trend is evident in EWON’s complaints. For over 12 months there has been a consistent pattern of increased complaints when compared to the same period in the previous year, with the main driver of increased complaints being high bills.  

In the third quarter of FY24, the Australian Energy Regulator reported an 11.6% rise in NSW customers repaying energy debts compared to the previous financial year.¹ 

Government and regulators continue to try to address cost of living pressures with measures such as the Energy Bill Relief Fund for all households and small business customers and increases to rebates for eligible customers. The AER is also reviewing the regulatory framework to ensure that consumer protections are fit for purpose for those experiencing financial vulnerability.  

In our unique position of speaking directly to customers, we can see how high debt is impacting their lives. The following case studies show different consumer outcomes as retailers take tailored approaches to assisting customers with high arrears.  

¹ Retail energy market performance update for Quarter 3, 2023–24 | Australian Energy Regulator (AER), Schedule 3

Case studies

 Goodwill gesture has significant impact

A customer’s electricity debt had been accumulating over five years resulting in an outstanding balance of around $24,000. He had been unable to work due to health problems but had been paying $70 a fortnight towards the debt. He also advised us he had solar installed. 

The customer told EWON he had been previously disconnected in late 2023 after receiving only one disconnection notice. When he received that notice, he contacted his retailer and asked for the account to be put on hold. The retailer said he would be given a case manager, but his electricity was still disconnected, and not reconnected for three days. 

The customer had recently found employment and contacted his retailer to say he could afford to increase his payments to $150 per fortnight. The retailer then requested that his payments increase to $300 a fortnight and said that if the payments weren’t increased his electricity would be disconnected again. He voluntarily increased his payments to $500 per fortnight, however this was causing him stress. His retailer also asked for him to pay $12,000 upfront, reducing the remaining balance by half. This was not affordable to him, and he advised the retailer that he was on a waiting list to see a financial counsellor. 

The customer then received a disconnection warning notice. He contacted his retailer and it placed a hold on his account for four days. The customer sent the retailer an email, however he did not receive a response so he contacted EWON for assistance as he was worried the power would be disconnected again.  

EWON contacted the retailer and it said it had had trouble contacting the customer but had sent the appropriate notices prior to disconnecting him in late 2023. It said the customer was on a payment plan but was not part of an affordability program.  

The retailer had recently initiated a fund to proactively support vulnerable customers manage cost of living pressures. Through EWON’s investigation the retailer identified that this customer was eligible for the program and in light of the customers circumstances, the retailer offered a goodwill gesture to waive the balance of the customer’s account, up to May 2024 – a credit of over $23,000. The retailer also referred him to see if he was eligible for a free battery installation. The retailer said it would contact the customer to establish a manageable payment arrangement of $300 per for fortnight, to cover his ongoing consumption.  

The customer was happy with the outcome and expressed how much of a difference it would make to his life. He also made steps to ensure his solar system is working appropriately. 

 Customer impacted by family violence faces disconnection

A customer called EWON for help after a field officer attended her property to disconnect her electricity in May 2024. She had been impacted by family violence and needed electricity for medical purposes. Due to her circumstances she had not received notices about a possible disconnection. She had found a bill with an outstanding balance of over $8,000 but couldn’t pay the full amount and wanted to establish a payment plan.  

EWON contacted the retailer to discuss the potential disconnection. The retailer said it had not been able to contact the customer but had sent the appropriate notices. It also noted that no payments had ever been made on the account.  

The retailer cancelled the disconnection request and said they could backdate the NSW Low Income Household Rebate as well as a better offer, waive any disconnection fees and apply a credit of over $400 to her account. The retailer also considered the customers circumstances and referred her to its affordability program, where it established a payment arrangement of $40 per fortnight and waived 20% of the customer’s account balance.  

The customer established a payment arrangement through Centrepay and had an appointment to be assessed for EAPA. She was satisfied with the outcome and planned to contact the retailer to discuss her account further.