Victoria’s New Reform Package supporting consumers throughout the COVID pandemic

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The Essential Services Commission (Victoria) has published its final decision on ‘supporting energy customers throughout the coronavirus pandemic.’

The final decision includes an initial temporary package of reforms that will take effect from 1 October 2020 and will last for six months until 31 March 2021. The commission notes that it has the discretion to extend this timeframe if required and if in the long-term interests of Victorian consumers.

The package of reforms is summarised below and interested parties can review the final decision here: https://www.esc.vic.gov.au/sites/default/files/documents/supporting-energy-customers-through-coronavirus-pandemic-final-decision-20200824.pdf

Need for change

The commission has been monitoring the consequences of coronavirus on energy consumers and this has led to the decision that additional reform is required:

Based on the evidence available to us since the start of the pandemic, we consider there is a need for targeted reforms to support residential and small business customers paying their bills through the pandemic.

The package of reforms developed by the commission is in addition to commitments made by the Victorian government including a $3.7 million package of support targeted at Victorians struggling to pay their energy bills as a result of the coronavirus pandemic.

The government package includes the recruitment and training of new financial counsellors, training of over 1100 frontline community workers to give targeted advice on dealing with energy bills, a new energy brokerage program to help 3000 households at risk of payment difficulty to get the best value energy deal, and an education campaign to ensure that Victorians are aware of their rights under the existing Victorian payment difficulty framework.

URGS applications

Retailers will be required to support residential customers in completing URGS applications including by submitting forms online on behalf of customers where possible and with customers’ consent.

Tariff check

Retailers will be required to do a tariff check for all residential customers receiving tailored assistance, not just those who cannot afford the ongoing cost of energy.

Small business

The commission has developed a mandatory guideline that will set out assistance that must be offered by retailers to small businesses experiencing financial stress due to the coronavirus. This assistance will be in addition to the requirements existing in the Energy Retail Code that small businesses adhering to a payment plan must not be disconnected for non-payment.

The proposed guideline is set out in Annexure C to the final decision. For the purposes of the guideline a relevant business customer is a business customer, defined in clause 3 of the Energy Retail Code, who is experiencing financial stress attributable to the coronavirus pandemic.

Pursuant to the guideline, a retailer who is contacted by a business customer regarding, or in connection with, potential or actual difficulty paying for energy costs must provide that business with information about assistance that may be available under the guideline including how it may be accessed.

Retailers must also use best endeavours to contact the business customer who has not paid a bill by its pay by date within a reasonable time prior to any disconnection to provide the customer with information about assistance that may be available under the guideline and how it can be accessed

The assistance that must be provided to relevant business customers is set out in clause 4. This includes, but is not limited to, providing the option of making payments of an equal amount over a specific period, or at different intervals, payment plans that would result in any arrears of the relevant business customer being fully paid within a period determined by the retailer and clearly set out to the relevant business customer, extending the pay by date for a bill for at least one billing cycle in any 12 month period, and practical assistance to help lower energy costs.

Clause 5 prohibits retailers from commencing or continuing with proceedings for the recovery of arrears from relevant business customers. It’s interesting to consider whether this is consistent with the Corporations Act and the rights of recovery for retailers therein.

Clause 5 also prohibits a retailer selling or otherwise disposing of the debt of a relevant business customer who is in arrears at any time other business customers receiving assistance under the guideline or within 10 business days after the business customer has been disconnected.

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