Electricity prices have increased by 86 per cent over the last five years and this is having an impact on households across the state. Community organisations have reported growing numbers of clients presenting with financial stress as a direct result of an electricity bill they couldn’t afford. And in 2013-14, a record 25,304 households were disconnected for not paying an electricity bill.
The community sector is set to continue to feel the impact of clients struggling to pay their electricity bills in 2014-15, as households are being hit with another increase, including a 66 per cent jump in the fixed daily service charge. This means higher prices for customers before they even turn on a light.
But it is not just the cost of electricity that is a concern. The electricity market is undergoing some major reform over the next few years which will change the way households participate in the market. Across the state there will be new technologies, new tariffs such as those which charge different rates depending on the time of day, and reforms to increase competition and introduce more choice for consumers.
One of the most significant changes is the removal of electricity price regulation in South East Queensland from 1 July 2015. This reform means the government will no longer have a role in setting electricity prices in the south east – instead, the market will determine the prices. This is expected to attract new energy companies offering a variety of deals to entice new customers. Some of these deals might be beneficial for customers, but they might be difficult to understand and could include tricks or traps for vulnerable people. We could also see an increase in telemarketing or door-to-door marketing, which generally tends to target vulnerable households who are home during the day. While customers may have ‘more choice’ after 1 July, this may also create more complexity and, potentially, more confusion for customers who simply want to be able to afford their electricity bill at the end of each quarter.
So, what is the role for the community sector? Well, with reform comes opportunity. As energy companies prepare for these changes to come into effect, they are seeking to engage directly with the community sector to better understand their customers. They are introducing new initiatives to meet stronger requirements around the support they must offer to customers experiencing financial hardship. These changes create lots of opportunities for community organisations to potentially access new funding streams, initiate new partnerships and collaborations, and think innovatively to shape the way energy companies service their customers and provide the best possible support to clients grappling with the rising cost of living.