THE MIKIVERSE

Energy companies can disconnect power to hard-up families under new laws

• By Natasha Bita
• From: The Australian
• May 27, 2010 12:00AM

Welfare groups are pushing for tough laws which prevent electricity companies from disconnecting power to people who can't pay their bills / AP Source: AP

• Welfare groups want rules toughened
• Electricity is "an essential service"
• Number of complaints surge across country

POWER companies will be permitted to disconnect customers too poor to pay their bills, under the first national consumer energy law to be signed off by the states and territories next month.

Welfare and consumer groups want the legislation toughened to ban companies from cutting off electricity purely on the grounds of a customer's incapacity to pay.

The Australian Council of Social Service regards electricity as an essential service, The Australian reported.

"Anyone can end up in hardship even temporarily -- you lose your job, you get sick, your partner dies," ACOSS senior policy officer Tony Westmore said yesterday.

"Rather than be disconnected, you should have some assistance to help you pay it off."

Victoria's Energy and Water Ombudsman, Fiona McLeod, is also lobbying for change, to prohibit power companies from cutting off supply until they have resolved any complaints lodged by the customer.

The draft legislation, to go before the Ministerial Council on Energy in Melbourne on June 11, states that power companies "must give effect to the general principle that . . . disconnection of premises of a hardship customer due to inability to pay energy bills should be a last-resort option".

It says "hardship customers" cannot be disconnected unless the power company has offered the customer two payment plans in the previous 12 months, and the customer has either rejected them or failed to pay instalments.

But the Consumer Action Law Centre's energy policy officer, Janine Rayner, said yesterday the legislation must do more to protect people who genuinely cannot pay their bills.

Complaints surge

Complaints against power utilities have surged in the past year, with state energy ombudsmen reporting a jump in the number of disputed bills and disconnections.

In Victoria -- where power companies are required by law to provide alternative payment arrangements and hardship programs -- the Ombudsman received complaints from 618 households disconnected because of non-payment, and another 866 who had faced disconnection.

In Queensland, the number of consumers contacting the Ombudsman over "account payment difficulties" almost quadrupled to 1103 in 2008-09.

In South Australia, complaints to the Energy Ombudsman leapt 63 per cent over the same period -- including a doubling in billing complaints to 4141 -- while the number of disconnections jumped from 297 to 464.

Tasmania's Ombudsman dealt with 21 disputes over disconnection and 35 related to payment difficulties, while Western Australia recorded 173 disputes over disconnections and 112 over impending disconnections.