News Media Releases Children, Young people and Families

Rules ignored in energy disconnections

The number of wrongful energy disconnections has reached an all-time high in Victoria, according to the Victorian Council of Social Service.

“Over the last five years, total disconnections have doubled, but wrongful disconnections have increased almost six-fold. Energy retailers must be put on notice that Victorians will no longer accept a cavalier approach to compliance with customer protections,” said Emma King, CEO of VCOSS.

Over the past five years from 2009-10 to 2013-14:

  • Wrongful energy disconnections have risen from 295 to 1707
  • Total energy disconnections have risen from 28,959 to 58,626

“In 2013-14, most wrongful disconnections were due to breaches of the Retail Code specifically designed to protect customers facing payment difficulty, according to the latest report on energy retailers’ compliance from the Essential Services Commission (ESC).”

“The ESC report also warns that some retailers seem to believe that wrongful disconnections are unavoidable and an inevitable part of how their systems work. Wrongful disconnections only occur when retailers don’t fulfill their regulatory obligations. The only acceptable number is zero.”

The Energy Retail Code governs energy retailers’ behaviour, and details the steps retailers must take before disconnecting a customer for non-payment – such as sending reminder notices and asking if the customer needs additional time to pay or would like to pay in installments. If a disconnection goes ahead without these steps being taken, it’s a ‘wrongful’ disconnection.

 “Energy retailers have a captive market for an essential service. In return, they have obligations to ensure Victorians who face payment difficulties are connected up with genuine hardship programs and not wrongfully disconnected from their supply.”

“Their cavalier approach to these obligations demonstrates the urgency of the review of energy retailer hardship programs ordered by the Andrews Government and now being conducted by the Essential Services Commission.”

“Victorians need stronger protections and a more powerful compliance framework that gives the Essential Services Commission the capacity to enforce the rules for retailers hard when they commit serious breaches of those protections.”

WDPYou can read the full VCOSS Submission to Inquiry into the Financial Hardship Programs of Energy Retailers.