Utilities hardship

1. Utilities hardship Getting better outcomes for vulnerable households

2. The Victorian Councilof Social Service • Peak body of the social and community sector in Victoria • Advocates for the development of a sustainable, fair and equitable society • Focus on the needs of low income and otherwise disadvantaged Victorians

3. VCOSS’s utilities priorities • Protecting vulnerable households from fuel poverty • Pursuing environmental sustainability in energy and water while protecting vulnerable households from price impacts • Representing the interests of consumers in the developing competitive market

4. The energy industry • Privately-owned distributors carry energy from the source to homes and businesses via a network of wires/pipes • Privately-owned retailers bill customers and purchase the energy used by their customers from the distributors • Retailers compete against each other, offering various deals to attract customers • Customers have a contract with their retailer for the supply of energy

5. The water industry • Government-owned water authorities each service a specific geographic area • In Melbourne there are three water retailers and a bulk water company that services the three retailers • They don’t compete directly with each other, but compete ‘by comparison’

6. Fuel poverty When people are can’t afford theenergy they need to live, and they may: • Under-consume with health and social welfare implications • Be disconnected from supply • Prioritise utility payments over other essentials such as food • Accumulate debt This is fuel poverty!!

7. Causes of fuel poverty Combination of inadequate income andlimited capacity to control costs due to: • Poor quality housing stock • Inefficient household appliances • Life cycle stages • Tariff structures • Special needs Women, children, people with disabilitiesand illnesses, and the elderly are affected most of all

8. Some statistics… • 30-40% of Victorian households claim concessions • 28% live in rural and regional areas • 25% are tenants • Housing costs have more than doubled in the last 15 years • A quarter of low-income households have trouble paying at least one bill a year

9. Protecting consumers • Regulatory framework • Standing offer — regulated tariff, standard terms and conditions • Consumer protection measures • Specific rules around hardship and disconnection • Concessions framework • Subsidising price for low-income and special needs households • Some assistance programs

10. Underlying principles • Electricity, gas and water are essential services • No-one should be disconnected solely due to capacity to pay

11. Basic entitlements • Flexible payment • Payment arrangements • Affordable payment plans • Security of supply • Help with energy over-consumption • Treated with respect

12. Things are getting better

13. What we’d like to see • For over-consumption… • Retro-fitting program • Appliance exchange for low-income households • Efficiency/quality standards for rental properties

14. What we’d like to see • For pricing… • Better tariff structure to improve affordability and the incentive to conserve • Better subsidies for especially vulnerable households • Plus… • Continued improvement in the way retailers deal with hardship