We live in tough energy times.
Power prices keep going up, well beyond inflation, wages, and income support payments.
Staying connected to energy supply can be a daily struggle if you rely on a low income.
An emerging body of research shows people are making sacrifices to pay utility bills, including cutting back on food and going without heating, cooling or lighting.
Echoing this research, VCOSS members had warned us people on low incomes were reducing energy and water use in ways most people wouldn’t have to contemplate. It’s one thing to try to be more energy efficient; it’s quite another to live in the cold and dark, or seek food relief from community organisations, just to keep the bills paid.
VCOSS wanted to learn more about these experiences. We therefore commissioned an RMIT research team to interview people who manage to pay their energy and water bills but face financial stress or other detriment in the process. Power Struggles tells these stories, drawing on interviews with 10 Victorian households.
We wanted to highlight these stories to policy-makers and utility companies who may otherwise hear little about them. One of the notable findings of this report is that most people interviewed had not been assisted by utility companies, despite bill struggles. People had pressed on, paying their bills and avoiding disconnection.
Households facing these circumstances can therefore fly under the radar and miss the attention of government, utility companies and the community sector.
Five key themes emerged from this research:
- vulnerability of sole adult and sole parent households—limited income support made it difficult to afford bill payments
- lack of access to affordable energy-efficient housing—housing conditions made it difficult to meet essential energy needs and manage bills
- interconnection between health and energy consumption—almost all people interviewed had health issues that increased use of heating and/or cooling, or would have benefited from more energy use
- making trade-offs to keep utility bills paid—including restricting heating and cooling, limiting cooking and food purchases, and not being able to afford children’s school books
- energy sector not facilitating consumer trust and engagement—people expressed feelings of frustration, anger, disadvantage and/or powerlessness as energy consumers
- households’ vulnerability to financial shocks—people had few financial ‘shock absorbers’ and often relied on formal or informal credit (from family and friends) and assistance from community organisations.
VCOSS makes several policy recommendations based on these themes. These recommendations have been previously made by VCOSS based on member feedback and qualitative and quantitative research. The real life stories presented in this report give further weight to the need for these policy reforms.
The problems highlighted by this report are not insurmountable. Government, utility companies and the community sector can together ease the burden on people who are battling every day to stay connected.
Summary of VCOSS recommendations
1. Increase and regularly review income support payments so they are commensurate with community living standards and cost of living increases over time.
2. Legislate minimum standards for private rental housing and stage the implementation of these standards.
3. Expand energy-efficiency retrofits across Victorian social housing stock.
4. Establish long-term energy-efficiency programs for low-income households.
5. Where housing modifications are necessary to support tenants’ essential energy consumption and other aspects of wellbeing, provide tenants with the right to make non-structural modifications without landlord consent, and prevent landlords from unreasonably refusing consent to structural modifications for these reasons.
6. Review eligibility for the Medical Cooling Concession to determine whether it adequately assists people with medical-related energy needs.
7. Provide guidance to energy retailers on how hardship programs and other assistance can best be promoted.
8. Require energy retailers to offer assistance to people at risk of falling into arrears.
9. Retain universal access to emergency relief and financial counselling services.
10. Improve energy price transparency in Victoria, including through the introduction of energy comparison rates.
11. Introduce an independent energy broker for residential customers.
12. Increase and index the Utility Relief Grant so it is commensurate with average electricity, gas and water costs.
13. Expand access to No Interest Loan Scheme loans by providing additional operational funding.