Victoria’s energy regulator, the Essential Services Commission, has recently set new rules compelling energy retailers to help Victorian small businesses pay their bills, if they are experiencing financial hardship during the coronavirus pandemic.
The new mandatory guideline will require retailers to provide “reasonable” assistance to small businesses experiencing “financial stress”.
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.
The guideline will come into effect on October 1, 2020, and will be in place for six months, unless otherwise extended.
Governments both federal and state have recognised energy bills as a major pain point for small businesses, even before they were hit by the economic effects of COVID-19.
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.
Some energy retailers have been voluntary providing support for small business.
The commission has provided an adaptable approach providing 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 “expects 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.
More information can be found on the ESC website below or by speaking to your Energy Retailer.