Second class customers: pre-payment meters, the fuel poor and discrimination

Utilities have a profound impact on the welfare of households not just because they deliver essential services, but because the delivery itself can be highly regressive. Pre-payment Meters (PPM) are primarily a credit management tool promoted by utilities to recover debt on the one hand and prevent the future accumulation of debt on the other. The termination of the credit relationship in favor of pre-payment effectively removes the role of the utility from the disconnection process. The act of disconnection is for all intents and purposes privatised. This enables utilities to avoid public reporting of disconnection rates (as they relate to inability to pay) and allows them to abrogate social responsibilities. PPMs do not address inability to pay, and are often the most expensive payment option. This reduction in affordability exacerbates rather than limits the impact of fuel poverty. Fuel poverty itself remains largely un-addressed in Australia for reasons that are perplexing, as many opportunities exist to eradicate it with benefits to customers, utilities and governments. Sadly, in an era in which the market is supposed to empower the customer, poorer vulnerable users of gas and electricity are being relegated to expensive and discriminatory residual markets such as that created by PPMs.