Letter to AER re review of minimum disconnection amount

This letter to the Australian Energy Regulator (AER) is in response to the AER’s review of the minimum amount owing for disconnection. The current approved amount is $300 (GST inclusive) for both electricity and gas. PIAC believes that disconnection should be a last resort and no customer should be disconnected from an essential service due to inability to pay; alternative measures (including hardship programs and debt reduction incentives) are more equitable and sustainable ways to deal with payment difficulty and non-payment. PIAC agrees with the AER that, in principle, customers should not be disconnected from an essential service for owing a relatively small amount or for being one quarterly bill behind.

PIAC submitted that the level of consumer protection afforded by the minimum disconnection amount of $300 is no longer appropriate given increases in energy prices since 2012. Average quarterly bill figures demonstrate that $300 has not been an effective protection against disconnection as low income (without concession) households and customers in Essential Energy’s distribution zone are automatically at risk of disconnection for failing to pay one bill. PIAC therefore recommends that the minimum disconnection amount should be increased to $520.