Energy retailers will be compelled to help Victorian small businesses pay their bills if they are experiencing financial hardship during the coronavirus pandemic, according to new rules set by the state’s energy regulator.
In a decision published on Monday, the Victorian Essential Services Commission said it will bring in a new mandatory guideline that will require retailers to provide “reasonable” assistance to small businesses experiencing “financial stress”.
The guideline will come into effect on October 1, 2020, and will be in place for six months, unless otherwise extended.
There is no set criteria for determining what constitutes “financial stress”, with the commission saying it will be up to businesses to demonstrate this to their energy provider.
According to the commission, there are approximately 277,000 small business energy customers in Victoria, and a growing number of these businesses are falling behind in paying their gas and electricity bills amid ongoing restrictions across the state.
Commission chair Kate Symons said in a statement that data collected from energy retailers shows average arrears among small business customers have grown by 20% for electricity and 30% for gas between April and the end of July.
While the commission said some energy retailers have voluntarily been providing support for small businesses to pay their energy bills, the previous framework only applied to residential customers, which meant retailers were not obliged to provide the same kind of payment difficulty support to businesses.
The commission had proposed a more prescriptive set of guidelines for small business assistance, including options for payment flexibility and payment assistance, however, after receiving feedback from energy companies, it decided to adopt an approach that “provides flexibility for retailers while retaining a requirement for retailers to engage with affected small business customers”.
Under this approach, there are no specific support measures that must be offered by energy companies, but the commission said it “expect[s] retailers will determine the assistance that is reasonable for a small business customer, having regards to the circumstances of the customer”.
“Reasonable” options may include allowing small businesses to:
- Make payments of an equal amount over a specified period;
- Make payments at different intervals;
- Extend due dates for bills by at least one billing cycle in a 12-month period;
- Enter into payment plans to pay amounts in arrears; and
- Access practical help to lower their energy costs.
The commission has also left open the door to making more prescriptive guidelines if it “find[s] evidence that retailers are not providing reasonable assistance” to small businesses struggling to pay energy bills.
In its announcement on Monday, the commission also extended support measures for residential energy customers.
Energy retailers will be required to help residential customers fill out application forms for utility grant relief from the government, including by submitting online forms on behalf of customers. Under the relief program, individuals can access up to $650 per utility type over two years, or up to $1,300 for households that use a single source of energy, such as electricity.
Retailers will also be required to conduct tariff checks for all residential customers who are receiving assistance, instead of only those who cannot afford their ongoing energy costs.
Both measures also come into effect on October 1, 2020, and will last for six months.
They coincide with a $3.7 million support package announced by the Victorian government, which will involve giving individuals who are struggling to pay energy bills access to financial counsellors and community workers.