Energy complaints surge as households struggle with rising bills

Households across New South Wales are feeling the pinch, with energy complaints soaring as power bills become harder to afford.

In the 2023-24 financial year, the NSW Energy and Water Ombudsman recorded a staggering 57% increase in complaints compared to the previous year.

Of those, 70% were about energy, with billing disputes making up the bulk of the cases.

NSW Energy and Water Ombudsman Janine Young told the SwitchedOn Australia podcast that the spike in complaints was a direct result of skyrocketing energy prices.

“Over the FY23 year, FY24 year, energy prices had increased by over 30% across New South Wales. So many more people couldn’t afford their energy bill.”

Some customers were feeling the pinch for the first time, unaware that financial assistance was available.

“Some customers are, understandably, very embarrassed to ask for help. They immediately think that if they can’t pay their energy bill, that it’s their fault, rather than the fact that energy has become unaffordable for many people,” Young said.

The human cost of rising energy bills

For those on tight budgets, the cost of electricity isn’t just an inconvenience—it’s a crisis.

“People tell us when we’re out and about, ‘I’m either buying food for my kids—not for me, for my kids—or paying the electricity bill,’” Young said.

“At the worst of energy affordability, it really is life and death. The kids go to school hungry, and you don’t learn so well when you’re hungry.”

“That’s happened over the last two or three years.”

Despite government rebates and concessions, many people aren’t getting the help they’re entitled to simply because they don’t know it exists. The Ombudsman’s office is working to change that.

Uncovering billing errors and offering solutions

One of the Ombudsman’s key roles is ensuring customers aren’t being overcharged.

“Accuracy of billing is really important [so] we’ll speak to the energy retailer about the circumstances of the customer,” Young explained.

Customers can be placed on affordability programs which offer lower rates, yet many don’t know to ask for these options.

Young also emphasized that retailers have a responsibility to provide meaningful support, not just payment plans.

“There might be grounds for the retailer to consider not only offering them an affordable payment plan, but perhaps doing some bill waiver, debt waiver, or offering some other assistance that they’d have available to them.”

The pitfalls of switching energy providers

With energy bills climbing, consumers are often advised to shop around for a better deal. But that’s easier said than done.

“Even switching is complex, and how does a customer know that they are getting a better deal?” Young said.

She urged people to use Energy Made Easy, the government’s independent comparison site.

“We always refer customers to Energy Made Easy, which is the Australian energy regulator’s independent energy plan comparative site. It is the only independent site that includes all offers.”

For those falling behind on payments, Young suggests contacting their retailer sooner rather than later.

“For customers who haven’t been able to pay their last couple of bills, they might just put that aside because actually opening it up is just too much of bill shock.”

She’s called on retailers to be more proactive in helping customers before they spiral into debt.

“What I’d like to see is energy retailers reaching out to customers who have always paid their bill, perhaps always paid on time, or maybe a day or two late, and when there’s a change in pattern—either non-payment or really late payment—I’d love to see retailers reach out then.”

“That’s the earliest opportunity to put that customer onto an affordable payment plan and to provide some other assistance.”

The problem with Time-of-Use tariffs

Another growing issue for consumers is time-of-use tariffs (TOU), which are being rolled out across Australia – they can drive up bills if customers don’t fully understand how they work.

“Time-of-use tariffs can work for some people who know what they’re on and have the ability to use energy appliances at the times when the cost of energy is the lowest, in the middle of the day, particularly if they’ve got solar and they’re generating their own,” Young said.

“But if you don’t know that you’re on that tariff, then you don’t know to change your habits. And maybe you can’t change your habits because you’re not at home at those times when energy is the lowest and your appliances may not have timers so that you can have them come on at times when you’re not there and energy is low in price.”

Young pointed to a growing push for better consumer education and more thoughtful implementation of tariff changes.

“Energy ombudsmen right across Australia are certainly highlighting the fact that time-of-use tariffs are causing consumer detriment to many people, and part of it is lack of education or information, or otherwise, it’s just lack of suitability.”

Navigating rising prices

Last week, the Australian Energy Regulator proposed raising the price cap for the default market offer—the rate applied to customers who don’t actively choose a cheaper plan. If approved, electricity companies could charge up to 25% more.

Young urged consumers to take control of their bills and avoid default market offers where possible.

“If you can avoid being on a [default market] offer and get onto a market offer, that puts you in a much better position to actually reduce your bills and put some pressure on your retailer to really assist you.”

“You’ll be able to get an offer that’s [around 20%] below that default market offer.”

To help people make sense of their energy costs, the Ombudsman’s office runs ‘Bring Your Bills’ days, offering hands-on assistance in communities across the state.

“If people understood their energy bills better, complaints would probably be cut in half,” Young said. But ultimately, affordability is the real issue.

“If they can afford to pay their energy bill, they don’t have to know it. They don’t need to understand it.”

The push for a Consumer Duty of Care

Consumer protections may soon get a boost. Last week, state and federal energy ministers endorsed a program that includes a consumer duty of care—something Young has been pushing for.

“We resolve complaints based on what we believe is fair and reasonable, having regard to laws, codes, and regulations and good industry practice,” she said. “But bringing in a duty of care is taking it that bit further.”

The policy would require the energy sector to actively prevent unfair outcomes for customers.

It would force the industry to look at what they do through “a fairness lens, so that you look at the outcomes that could be unfair to customers, and you try to build policies, processes, and practices that actually prevent consumer harm from a fairness perspective.”

With trust in the energy industry at an all-time low, Young sees this as a critical step forward.

“When a government is saying, ‘Should we have a duty of care?’ I’m going to be there being very optimistic and supporting it and being one of the people that helped drive it.”