Having your electricity disconnected, or copping a default on your credit file because you just can’t afford the astronomical power bills you are receiving may be less frequent, if a Senate Inquiry which begins today in New South Wales is successful in helping to cap soaring electricity prices. This type of Inquiry is typical of what will be happening in every state across Australia in the near future, or states have been warned by the Gillard Government that come this December, it will make moves to regulate energy.
By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.
The Senate Select Committee on Electricity Prices will also hold hearings in Melbourne, Perth, Brisbane and Canberra, and is due to report back on November 1.
The Committee will hear a number of submissions from industry and consumer groups in order to identify why prices have soared and investigate how households and businesses could reduce their costs.
One vocal advocate for consumers helping to stop rising electricity prices is consumer group Choice, who made 14 recommendations to the Senate committee ahead of today’s hearing.
His comments were featured in The Australian today in the story Inquiry into electricity bills to begin:
Matt Levey, head of campaigns for consumer group Choice, will tell the inquiry that regulatory change is needed to stop the “gold plating” of the energy network.
He said the main driver of higher power prices was the billions spent on power infrastructure.
“This is clearly a broken system, and our governments need to cooperate and ensure we never see these sorts of cost increases again,” Mr Levey said.
The average NSW household’s annual electricity bill has more than doubled since 2007 to about $2,200, according to Choice.
Mr Levey’s comments were also highlighted in this story, Choice urges electricity price reforms:
In its submission, Choice urged the Senate committee to consider strengthening the Australian Energy Regulator and to allow it to scrutinise the cost-effectiveness of infrastructure spending.
It also wants networks to invest in the most cost effective solutions to meet consumer needs and an emphasis on reducing peak demand.
“Moves to help households switch electricity providers, like banning exit fees, are welcome but they are no substitute for doing the heavy lifting and putting a stop to the wasteful spending that is pushing up electricity costs,” Choice head of campaigns Matt Levey said in a statement.
The Energy Retailers Association of Australia (ERAA) in its submission to the committee has said energy retailers have very little influence over the causes of price increases in recent years.
“It is important that senators understand that retailers are the billing agent for the entire electricity industry value chain, meaning they bear much of the consumer backlash over rising electricity prices,” ERAA chief executive Cameron O’Reilly said.
Whilst energy retailers may have had little influence over prices in recent years, they do have an influence on how they deal with energy complaints and energy default disputes – and this may also be what also contributes to customer dissatisfaction at soaring prices.
When we hear recently that 10,000 South Australian energy consumers had their power disconnected in the 12 months to July, because they just can’t pay their bills and that this is an increase of 38 per cent in disconnections, then you do have to wonder, how efficient is the system? Likewise, despite many programs within energy companies for customers experiencing hardship, the above statistics beg the question, how efficient and accommodating have energy providers been in delivering these hardship provisions to those clients that need it most? After all, power is a basic essential – not a luxury item.
The Australian Council of Social Service’s (ACOSS) submission to the senate inquiry into electricity prices included some recommendations on how to improve on affordability for those on low incomes:
ACOSS recommends that consideration be given to more flexible billing options to help low income households control their expenditure, such as:
• The introduction of pre-payment meters on a voluntary basis where they suit a customer’s needs and appropriate consumer protection policy is in place.
• Offering monthly billing to reduce bill shock often caused by the current quarterly billing in arrears.
ACOSS also recommends that people on Allowances should receive the Utilities Allowance to which people living on pensions are entitled.
These seem like great recommendations to help those battling the rising cost of living.
In the area of disputed energy credit listings, another big issue which we find arises amongst our clients is the lack of adherence to correct notification procedures when placing a default on the customer’s credit file. Many of our energy clients believe they have not been given enough time to remedy the outstanding account, prior to being issued with the default. Does this also demonstrate an eagerness to crack the whip without regard for those doing it tough?
We hope the Inquiry addresses some of those wider issues as well. We look forward to hearing the outcome of this Inquiry, and subsequent inquiries in the other states come November 1.
If you have an energy default, Clear-Out writ or Judgment you would like help to dispute, contact a Credit Repair Advisor at MyCRA Credit Rating Repairs 1300 667 218.
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