COVID shines light on failure of energy system for people experiencing disadvantage

16 December 2020

Too many people on low incomes are still trapped in energy debt, deprived of energy or face disconnection warns the Australian Council of Social Service (ACOSS) ahead of the Energy Security Board’s release of its annual Health of the National Electricity Market (NEM) report.

ACOSS calls on the ESB to maintain its rating of energy affordability (current status) as ‘critical’, to increase the outlook for affordability to ‘moderate-critical’ in general and to ‘critical’ for vulnerable customers.

The report also calls on the National Federation Reform Council to urgently establish a permanent committee to annually review and progress reforms to reduce energy vulnerability.

“The challenges created by COVID-19 have shone a light on the failure of the energy system to protect people experiencing vulnerability,” said ACOSS CEO Dr Cassandra Goldie.

“Despite reduction in average wholesale electricity prices; energy debt, deprivation and risks of disconnection remains persistent, impacting on people’s ability to access enough energy for their health and wellbeing.

“The Coronavirus supplement, that doubled JobSeeker for a time, helped people reduce pre-COVID debt, but energy data shows energy debt is now increasing again for more people and will only get worse as JobSeeker is cut further in December.  For others on temporary visas, estimated to be over a million people, impacted by loss of paid work hours, and with no access to income support, the situation is dire.

“The report also highlights flaws in the energy transition, where people experiencing vulnerability continue to face barriers to accessing energy efficiency measures and new technologies like rooftop solar, and that a lack of planning around the gas transition means those who can least afford to move off fossil gas will likely pay the most.”

ACOSS Senior Adviser Climate and Energy, Kellie Caught, said “Given the range of current persistent and emerging issues impacting on energy affordability, we urgently need a permanent structure to identify market and non-market solutions to reduce energy vulnerability and ensure they are implemented.

“In the meantime there are actions Governments can take now to reduce energy debt and systematic vulnerability, including permanently increase the rate of JobSeeker, provide emergency payment to people in hardship arrangements, extend the moratorium on disconnections, and invest in energy efficiency and solar for low-income homes.”

  • Permanently increase the rate of JobSeeker, Youth Allowance and related payments by $185-$275 per week;
  • Extend the moratorium on disconnections until at least June 2021 and ensure pre-visit is done before disconnections are made;
  • The Federal Government provide additional short-term (up to 12 months) financial support (in recognition of additional hardship bought on by COVID-19), via an emergency payment allowance to customers in hardship arrangements;
  • Improve the hardship framework in-line with Victorian Payment Difficulty Framework;
  • Implement a National Low-income energy productivity program (NLEPP);
  • Progress ACCC recommendation 37 to improve energy concession schemes across the NEM to ensure that, to the extent possible, there is a uniform, national, best practice approach to electricity concessions; and
  • A series of recommendations to ensure the transition away from fossil gas is managed to reduce risks and ensure people on low-income with limited choice who are least able to transition are not left stranded and are supported.

View and download the ACOSS Health of the NEM report 

Accessible version here