How can energy retailers help consumers manage bill stress?

With four in ten Australians facing financial distress, many confront a stark choice. Do they pay their utility bill, or put food on the table for their kids?

Panellists at Australian Energy Week dug deep, discussing support for vulnerable energy consumers, and opportunities to improve programs, access and financial resilience in tough times.

This is what Energy Consumers Australia Interim CEO Jacqueline Crawshaw, Genesis Energy (NZ) Customer Operations Hope Allum, and Aurora Energy CEO Nigel Clark had to say. 

Renegotiating relationships with the community

The latest Energy Consumers Australia six-monthly survey painted a dire picture, Crawshaw said, with 52% of households and 59% of businesses worried about paying their energy bills. There has also been a 9% fall in market confidence over the last year.

Consumers don’t have the tools they need to manage energy use and costs, and only one in five say retailers and government are communicating well about the energy transition.

According to Crawshaw, consumers want practical resources to help them understand and manage their energy usage, not just billing details.

“The problem isn’t lack of information, but too much. Consumers find it overwhelming and distracting. They need clear communications, to empower them with their energy usage and help them through the energy transition.”

She pointed to a telling case study, involving a pensioner in West Melbourne. The only information she ever received from her retailer about her energy usage was attached to a disconnect notice.

“Customers clearly want access to rebates, payment plans and financial support mechanisms, to help them take control of their energy use,” Crawshaw said.

Yet 30% of households and 52% of businesses who reach out feel they don’t receive the help they need, the survey shows.

Providing deeper financial support, backed by data

For Clark, heading Tasmania’s largest retailer Aurora, the goal is “understanding customers, creating engagement and sharing their journey.”

Tasmania has a high proportion of people in hardship, so the company has created special initiatives to track and support consumers under stress.

The Aurora team has undergone specific vulnerability training. The company runs a Concession Awareness Campaign, so every customer knows their entitlements.

“We aim to be proactive, rather than reactive,” Clark said. “With 60% of Tasmanians now on smart metering, we use data to see where hardship is emerging. We also want customers to see and monitor their own usage. Time use tariffs can encourage people to change behaviour, saving them a lot of money.”

If a person in the hardship program gets through the quarter and makes all their payments, Aurora tops up a further payment. This encourages people to complete the program, then leave it.

“We’ve made more than 7,000 payments to customers, totalling $830,000, with another $200,000 given to the Salvo’s Tasmanian Energy Relief Fund.”

The need to share effective initiatives

While New Zealand shares Australia’s cost of living crisis, the nature of the problems is different.

Allum explained that whilst the unit price of electricity is relatively cheap in New Zealand, consumption is high due to poor housing stock. Old heating options, lack of curtains and bad insulation all contribute to energy inefficiency.

Rental properties are forty-five times more likely to be vulnerable, she added, yet ‘healthy’ home’ standards are not being enforced in rentals. This presents a real opportunity to improve housing stock, heating and insulation.

“Our aim is no disconnections and no customers left behind. We are working with consultants to remove the shame and stigma of financial stress, so customers are more likely to reach out and access our programs.”

According to Allum, a trial is underway. The nation’s five main retailers are each taking a hundred customers who would normally be rejected due to credit scores.

“We will work intensively with them for 12 months and see what levers we can pull for success. Retailers need to share their good initiatives, define ‘hidden hardship’ and improve customer trust.”

What about remote disconnections?

Clark and Allum agreed that remote disconnections were cheaper for the customer, at around $26, rather than $200 for in-person. They were also quicker to reconnect, with no health or safety issues involved.

Crawshaw, however, noted the substantial increase in Victorian disconnections when smart meters were introduced.

“We need to prevent vulnerable customers getting to that point,” she said.

Can fortnightly bill cycles help prevent ‘bill shock’?

There was no technical reason preventing fortnightly or monthly billing, if the customer had a smart meter, Clark noted.

Allum said Genesis could only offer monthly billing currently, but is working towards the ‘ideal’ of pressing an app button to generate a bill.

Bill shock is bad, Crawshaw said, but the high ‘tech literacy’ expectations put on consumers also need to be managed.

Summing up

‘We can renegotiate the relationship with customers by providing the right information, at the right time, from trusted sources,” Crawshaw said.

“It’s important to catch people before they are disconnected, building engagement to get them back on track,” Clark believes.

According to Allum, retailers are working hard to be more co-ordinated, with disconnections now a last rather than first lever.

“But there’s so much more we can do.”