ESC Review of the Payment Difficulty Framework

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In January 2019, the payment difficulty framework commenced in Victoria to ensure that disconnection for non-payment is a last resort and that vulnerable customers are supported to pay for their energy usage. After two years of operation, the payment difficulty framework remains the most stringent customer protection framework in the country and has been considered a success by the Essential Services Commission (ESC). Now the ESC has commenced a review to evaluate and assess the operation of the framework in meeting its objective.

The ESC does not intend for the review to result in significant reforms to code obligations or to revisit the underlying rationale of the framework. Rather, the ESC seeks to provide more actionable guidance on the framework. The aim of the review is to:

  • Identify issues with the current framework;
  • Work with stakeholders to design practical solutions to identified issues; and
  • Develop guidance notes or industry education material to increase the effectiveness of the framework.

From 20 September 2021 until the end of October 2021, the ESC will consider various data sets from energy retailers, community groups, and consumer surveys. The ESC has invited stakeholders to make submissions on the following key review questions:

  • How are the entitlements under the framework communicated to customers (from a single retailer, and across the sector)? From your experience, are the ways they are communicated clear and consistent?
  • How much do you think customers are aware of, or understand, their entitlements?
  • How helpful and practical has the payment difficulty assistance provided to customers been?
  • How confident are you when advocating on behalf of someone to access support under the framework?
  • Have you observed a change in customer satisfaction of their engagement with retailers about their entitlements? If so, to what extent and why?
  • Have you observed a change in customer engagement from diverse and hard-to-reach customers about their entitlements?
  • What aspects of the framework have been working well?
  • Have you, as a consumer representative, energy retailer, or other stakeholder, encountered any barriers or difficulties during the implementation of the framework?
  • Are there areas of the framework that you found confusing or unclear?
  • Are there other strategies or approaches retailers have considered (within or outside the framework) that can better help customers and achieve the framework’s objectives? If so, what are these strategies or approaches?
  • Are there other problems faced by energy customers that may not be covered by the payment difficulty framework?

The key review questions can be found here, together with the questionnaire providing for submissions.

The ESC will receive submissions until the end of October 2021.  After stakeholder submissions and consumer surveys have been received, the ESC will provide an analysis in its Findings report by  March 2022, followed by a better practice program to be published in June 2022.

Key Takeaway

The review is an opportunity to inform the ESC on the issues exempt sellers and retailers have faced over the past two years within the current framework, and point to areas requiring improvement. It is a good time for retailers and exempt sellers to review their compliance with the framework and identify areas of friction or difficulty. 

Compliance Quarter is here to assist exempt sellers and retailers in drafting their submissions.

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