EWON's recommendations

 1. Remove the ‘two strikes’ rule from NECF

The intent of the 'two strikes' rule is to help ensure customers have had at least two opportunities to adhere to a payment plan before the retailer pursues disconnection. But this one-size-fits-all rule, as currently applied, is not fit for purpose.

While not all retailers apply the ‘two strikes’ rule strictly, it can operate as an automatic barrier to assistance. Retailers can miss engagement opportunities because they are focusing on whether the customer’s payment plan history means they are obligated to help. Retailers can ask for large lump sum payments the customer cannot afford, as they are no longer required to offer a payment arrangement or consider their capacity to pay. Payment plan history should be just one factor in a range of factors that retailers consider when assessing how they can assist a customer – not a barrier at a crucial moment of engagement.
 

 2. Prohibit upfront payments to avoid disconnection or achieve reconnection for customers experiencing payment difficulties

Explicitly prohibiting retailers from requiring an upfront payment for any customer experiencing payment difficulties would strengthen retailer’s existing affordability obligations.

Demands for upfront payments do not only occur when a customer has had two incomplete payment arrangements in the past 12 months. This also occurs if the retailer does not effectively use engagement opportunities to identify a customer experiencing payment difficulties.

Receiving a disconnection warning and getting disconnected both indicate potential payment difficulties. Customer engagement before or after disconnection is too valuable to waste by not paying attention to these indicators and inflexibly requiring a substantial payment the customer cannot make.
 

 3. Implement debt relief for consumers who cannot afford their energy costs

The NSW Budget 2024-25 included funding to support customers in long term energy debt to reduce or eliminate their debt as part of an Energy Debt Relief Trial. This was a significant step towards implementing one of the AER’s Game Changer reforms. These reforms were aimed at addressing the fundamental issue that the National Energy Market and the NECF were not designed to accommodate households that simply cannot afford to pay their energy costs and whose financial circumstances are unlikely to change.

We recommend that the NSW Government implement a permanent debt relief scheme to support and enhance other energy affordability schemes, such as energy rebates and Energy Accounts Payment Assistance (EAPA). EWON was involved with supporting the delivery of the trial and would welcome opportunities to contribute to the further implementation of this and other Game Changer reforms.
 

 4. Increase the minimum disconnection amount from $500 to $1,000

We welcome the AER’s review of the disconnection threshold for the first time since 2017.²⁴ This resulted in the disconnection threshold scheduled to increase from $300 to $500, effective 1 July 2026.

However, we encourage a shorter timeframe before a future review, preferably in the next 1-3 years. We recommend the AER consider increasing the threshold to $1,000 in line with Victoria.
 

 5. Establish a compensation framework for customers who have been wrongfully disconnected

The NECF does not have a framework for compensating customers where a retailer has wrongfully disconnected a household. We recommend the introduction of such a framework, which could include a fixed payment amount per day disconnected, or part thereof, like Victoria’s wrongful disconnection payment.²⁵ This would recognise the harms and financial impacts of disconnection and ensure retailers are careful to comply with the rules – especially the principle of disconnection as a last resort.
 

 6. Remove the term ‘hardship’ from the NECF

Unless you change the terminology, you don’t change the mindset. A radical change in language would support self-identification and retailer identification of customers experiencing financial, personal or household challenges. If retailers offered Energy Affordability Programs rather than ‘hardship’ programs, for example, we may see a greater number of customers who experience affordability difficulties self-identify. If customers were not given a stigmatising label of ‘hardship customer’, it may also open the door to initiating easier conversations between retailer staff and the customers who need these programs.
 

 7. End disconnection of customers currently defined in the NECF as ‘hardship customers’

A customer is currently protected from disconnection if they are a ‘hardship customer’ (as defined in the NECF) and are adhering to a payment plan.²⁶

We are calling for disconnection to be prohibited for a ‘hardship customer’ regardless of whether they are adhering to a current, active payment plan. This would not include any customers who show absolutely no willingness to engage or pay. In current terminology (and strongly driving for the word ‘hardship’ to cease), this would protect those customers the retailer has identified as unable to make payments due to ‘hardship’, in accordance with their ‘customer hardship policy’. Disconnecting these customers only worsens financial stress and further erodes the health, safety and stability for whole households, including vulnerable members like children.