Utilities hardship Getting better outcomes for vulnerable households

The Victorian Council of 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

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

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

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’

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

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

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

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

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

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

Things are getting better

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

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