AGL shares insights and experiences on the regulated Payment Difficulty Framework in Victoria

AGL has provided its findings and data to the Essential Services Commission (the Commission) as part of the review into the regulated Payment Difficulty Framework in Victoria. This review follows the Commission’s consultation on the review approach to which AGL responded in September 2021.

The Victorian Payment Difficulty Framework (PDF) refers to a set of rules in the Energy Retail Code which require all energy retailers to offer and act on a comprehensive suite of support options for customers experiencing short to longer-term financial difficulty. The PDF includes measures such as proactively informing customers of their entitlement to payment assistance as well as the available government assistance, long-term payment plans, six-month debt freeze and practical assistance to reduce energy consumption for payment hardship customers who cannot afford to pay for ongoing usage. The framework is intended to:

• Help customers avoid falling into debt;
• Help customers pay for their ongoing usage, repay their arrears and manage ongoing energy consumption; and
• Only use disconnections for non-payment as a measure of last resort.

As part of the PDF review, AGL also delivered its key findings and experiences on the PDF directly to the Commission and we continue to provide important data in response to the Commission’s requests, to help inform on the tangible outcomes of the PDF objectives. AGL’s  insights into the PDF are largely consistent with the Commission’s early observations:

• There is greater awareness of the entitlement to payment assistance options from the customer’s retailer. However, in Victoria, 40-50% of the payment arrangements established in line with the PDF are broken due to non-adherence.
• Debt levels continue to trend upwards in Victoria since the implementation of the PDF. Long-term payment plans, low instalments, and a limited capacity to reduce energy consumption are contributing to growing debt levels for customers experiencing financial difficulty, particularly those customers receiving tailored assistance who cannot afford to pay for ongoing usage.
• Disconnections for non-payment have slightly reduced compared to pre-PDF levels. There are a number of factors to unpack for this objective, including the moratorium on disconnections which remained in place for most of 2020 and 2021 as a result of the COVID-19 restrictions.

You can read AGL’s response to the consultation questions as well as recommendations to improve customer outcomes under the PDF here.