Alinta Energy improves systems and waives more than $1 million in customer debt following an AER investigation.

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On 8 October 2021, the Australian Energy Regulator (AER) announced that, in response to an investigation, Alinta Energy have substantially improved its systems and was waiving more than $1 million in energy debt owed by more than 400 of its customers.  The outcome arose as a result of an investigation carried out by the AER into alleged non-compliance with Alinta Energy’s obligations with respect to vulnerable customers and its hardship program.

The AER was concerned that during the period September 2019 to March 2020, Alinta Energy may have required vulnerable customers to make upfront payments or to seek financial counselling in circumstances where it should have offered those customer’s access to payment plans or assistance under Alinta’s hardship program.  Furthermore, the AER alleged that in some cases Alinta Energy had wrongfully disconnected customers for non-payment of their energy bills.

In commenting on the investigation, AER Chair Clare Savage said, “We are very concerned about the alleged conduct, in particular Alinta’s lack of identification of customers in hardship.”  

The outcome of the investigation is noteworthy in that the matter was concluded by agreement resulting in customers directly benefiting by the waiver of debt.  The AER noted that, “had it not been for Alinta’s willingness to acknowledge the AER’s concerns, improved its systems and processes, and offer substantial customer redress, we would have taken this matter further.”  As far as we are aware, this is the first instance where such an outcome has been negotiated between the regulator and an energy retailer.

Lessons: As with all enforcement actions, there are a number of lessons that energy retailers can take away from this matter.  These include the importance of ensuring that customer hardship policies are strictly adhered to.  Inter alia, this means that retailers must not require customers experiencing financial hardship or payment difficulties to see a financial counsellor and/or make an upfront payment towards arrears owing on their accounts.  Retailers should not automatically cancel customers payment plans after one missed payment and instead should contact the relevant customer in a timely manner to assist with that missed payment as required by their hardship program.  Finally, all retailers must ensure that disconnection is a last resort measure.

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