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Aurora – Financial Stress

Dr Rosalie Woodruff MP

Dr Rosalie Woodruff MP  -  Tuesday, 30 November 2021

Tags: Aurora, Cost of Living

Dr WOODRUFF - Minister, earlier this year we heard that apparently $3.6 million remained unspent of the $5 million COVID-19 customer support fund that Aurora had. Can you provide an update on the expenditure from this fund and whether there's an intent to extend the fund when that $5 million runs out?

Mr BARNETT - Yes, thanks very much for the question. It's a very fair question and the $5 million, as the CEO indicated, COVID-19, March 2020 kicked in and it's been very challenging for many Tasmanian customers, residential and business. That $5 million was an initiative of the board, supported by the Government. We really appreciate it. In terms of the breakdown of the funds used and the $2 million available that's still there, I'll pass to the CEO.

Ms KARDOS - Thank you, and thank you for the question. The COVID 19 support fund was something that we, as I said earlier, initiated from early in the global pandemic in recognition of the support that would be needed. We're pleased that we've been able to provide in excess of $2 million to Tasmanian businesses and residential customers, our customers, in addition to the support that's been provided at a federal and state level.

In terms of what have we used that for, we've been really proactive engaging with the community services sector, with business, industry representatives to ensure that we are targeting and reaching out to those who have been most affected.

Probably the best example of that most recently is in relation to our industry support payment that we'd been making to small businesses. These are small businesses that have been directly impacted by COVID 19, for example, the hospitality industry, seafood industry, events, et cetera. What we've been able to do, through consultation with government agencies as well as the business and industry sector, is ascertain how can we provide further support. The industry support fund has made available a $500 credit to all eligible businesses towards their energy bill. We've had more than 860 customers apply for that and become eligible. Those payments will be placed on their accounts from 1 December.

That's a really good example of what we're using the COVID 19 support fund for and I think as we realise, as this global pandemic continues and new variants come about, is that we're really confident that we'll continue to be able to provide much valued support to our Tasmanian customers, and continue to support those customers and our community through these very challenging times.

Dr WOODRUFF - Through you minister, thank you, Ms Kardos, I didn't hear the answer to the question, which was there was $2 million that has been spent but there was a $5 million commitment or pledge; $3 million remains. Is that intended to still be spent? There are 78 000 customers who have had some sort of payment plan. You said that before. There's clearly a need. That $3 million left, will that still be spent? If so, is that just going to be rolled over indefinitely or is it going to be spent by a certain amount of time?

Mr BARNETT - Can I just kick it off and then I'll pass to the CEO because I think it's a good question. In terms of the advice I have from 30 September this year, so outside of the financial year, up to 30 September this year, $2.075 million in support had been provided through Aurora's $5 million COVID 19 customer support fund, comprised of support for nearly 400 business customers and 3804 residential customers, including $295 000 provided to 2089 customers as part of the YES payment support incentive.

As the CEO mentioned earlier, some of those businesses hit hard, hospitality, tourism, accommodation, the arts, events, transport and seafood, many of those businesses received a $500 bill credit applied to their next Aurora account. That will be from 1 December, which is tomorrow. So, in coming days and weeks, this is going to be very welcome to those businesses.

I might pass to the CEO to add to that, in terms of the $2 million plus that is still available.

Mrs KARDOS - Apologies for not specifically answering the question. Yes, the intent is that it is a $5 million COVID 19 support fund. As I said at the outset, we are not sure how long this global pandemic will last, but what we do know is that we have sufficient funds to continue to support Tasmanians through these challenging times.

Dr WOODRUFF - So, indefinitely, and the other $3 million will be dispersed?

Mrs KARDOS - That is the intent. I know probably no better than anyone else in this room how long this will happen, and what events will unfold as each year progresses, but what I do know is that we have made a pledge of $5 million for the support fund. There are still sufficient funds in there, and we will continue to proactively engage with business, industry and the community services sector to continue to provide support, come what may.

Dr WOODRUFF - Thanks. Minister, the Energy in Tasmania Report 2019-20 is prepared by the Office of the Tasmanian Economic Regulator. That shows there's' been a significant increase in customers experiencing payment difficulties, which we've heard; particularly, people who have not been subscribed to the Your Energy Support Program - the YES program. What do you think is the reason people who are experiencing payment difficulties would not chose to participate in the YES program? Is everybody provided with the information about the program?

Mr BARNETT - I appreciate where that's coming from and I will pass to the CEO. Your point about it being particularly challenging during the COVID-19 time has been very well recognised by Aurora Energy and the YES program does work very well. I've been hands on and I've seen that for myself, and I know how much it is appreciated by those that do receive it. I'll hand over to the CEO, in terms of those that can access it and don't.

Ms KARDOS - It's a really interesting question and to be honest I really wish I knew the answer why, for some customers engaging with us. One of the things we recognise and understand for a lot of customers, there's a lot going on in their lives and energy is just one small component of that. Engaging with your energy retailer if you're in some form of financial distress may not be a priority. What I do know is we always offer to all our customers the YES program, the myriad ranges of support that we have available, whether that's payment arrangements or debt relief or the COVID-19 support fund. We've got a whole host of options available; but some customers they may not want to participate and typically it depends on their individual circumstances.

We focus on ensuring that we're there to provide support when they need it and that the YES program is always available to them. We have continued to develop the YES program; the minister mentioned before, that we have added an incentive payment to the YES program. For YES customers who have continued to meet their payment arrangements, in recognition for that ongoing good payment behaviour, we have then honoured a payment as well up to a maximum I think of $200. Since 30 September with that trial we've paid out $295 000 and 2089 YES customers have benefited from that. I know from the customer verbatims and the feedback we've been provided, those customers have really benefited from it.

I should also mention, we spend a lot of time engaging with the community services sector and frontline people. These are the people who are engaging with these customers who are experiencing financial difficulty. We've put a lot of focus and energy this year in giving them the skills and the information and the resources, so they can tell them about the support that's available for them at Aurora Energy. One of the things we developed this year, based on the feedback from those frontline support areas - the Salvation Army, the community houses, et cetera, is we've created a bit of a community information hub to better assist them and equip them with the information. There are still people out there who don't know about the YES program, but we continue to tell support people about it. Pleasingly, in the last 12 months we've seen roughly 26 per cent of YES participants successfully exit the program. That is, they've paid off their energy and got back in control of their energy bills.


Dr WOODRUFF - Thank you. Minister, I would like to understand a little bit more about the YES customers who have used the program. The annual report says, 'Aurora Energy helped 636 customers get back on top of bills, via the YES program'. This is on page 19. This number was 555 in 2019 20 from previous reports, and 1146 in 2018 19, before the pandemic.

Is it correct, in my understanding of these figures that, despite having more people participating in the YES program, there are fewer people who are actually successful in catching up on paying their debts through the program? Is it a reflection of the level of real energy stress that an increasing number of Aurora customers are in?

Mr BARNETT - Thanks very much for the question and I will pass it through. The advice I have for the 2020-21 financial year is that the program has assisted over 12 500 customers since its creation. In that financial year, the number of customers being supported by the program decreased 12 per cent on the previous year. I'd like to pass to the CEO to add to that and assist the member with more details.

Ms KARDOS - Your numbers are correct. At the end of June 2019, our completion rate was around 52 per cent, so 1146. In June 2020, 28.9 per cent, 593 customers, and in June 2021, 34.7 per cent, 636 customers. What drives those completion rates really depends on the affordability, what can they afford to pay in terms of their ongoing payment plans and to what extent can they start paying down whatever debt they've already incurred and what was their starting debt position? There are a number of variables at play that really drive those successful completion rates.

A fantastic customer story that was shared with me just recently is one of our original YES Program participants has successfully completed the program in the last couple of months. They never missed a payment over that time and they have been steadily working on meeting their quarterly energy needs, just chipping away at the debt they started the program on. For some customers, depending on what is going on with them, that might take a lot longer than somebody who might have a greater ability of paying off more

Dr WOODRUFF - More disposable income.

Ms KARDOS - or may just have greater ability in paying off that original debt, or their starting debt position is far lower than another customer. It really depends -

Dr WOODRUFF - There's a lot of variability.

Ms KARDOS - on the customer's circumstances. Yes, you could read into that. We did see an increase in the number of YES customers last year as a result of COVID-19. I am pleased to see that a further 636 have been able to successfully complete the program. That says they've been able to cover their quarterly energy costs and, as well, pay off whatever legacy debt they have.

Going back to the question about disconnections, one of the key things for us is really supporting our customers not to find themselves in a really large debt position. I say disconnection for non-payment is a last resort measure. There is a point where you have to get engaged with the customer and talk to them about what we can do to support them to help them either get better control of their quarterly energy costs, we provide energy advice, we assist those customers -

CHAIR - I don't want to be rude, but I am going to wind you up so that -

Ms KARDOS - For us, it's really about helping customers understand what they can do to better control their energy costs. We don't want them to be stressed and have it causing them anxiety because of their energy bill. It's the last thing we want.

Dr WOODRUFF - Minister, if we go back to the customer support fund. There was $2 075 000 dispersed to businesses and residences. Mrs Kardos said that $3874 went to residences. Could I get a breakdown of that $2 million-odd dollars? What proportion went to businesses and what proportion went to residences? Was there a standard amount that went to residences or did it depend on the person's circumstances?

Mr BARNETT - Thank you for the question. I am sure we can assist the member and the committee.

Mrs KARDOS - At 30 September 2021, of the $2.075 million that has been spent, 398 business customers, that would not include the 866 small business customers that are going to receive the industry support payment I mentioned earlier because it won't be applicable until from tomorrow. Then 3804 residential customers and a further $295 000 that I mentioned before to 2089 customers as part of the 'YES' support program. That is an incentive payment that I mentioned before.

For the 3804 residential customers, that the while point of this program is quite targeted. It really depends on the nature of the support. It may be -

Dr WOODRUFF - The proportion between residences and businesses was what I was interested in.

CHAIR - The time for scrutiny has expired. We will start again at 9 a.m. tomorrow with TasWater. Thank you, minister and your officials for your time.