West Australian households have hit record amounts of debt to power providers.

The  state's economic watchdog has found that average debt levels owed by customers in financial hardship hit new highs in the year to June 30.

This was despite a $600 handout by the government for every residential electricity customer's account. 

The Economic Regulation Authority (ERA) report shows average bill debt for hardship customers of state-owned utilities Synergy and Horizon Power leapt from $772 in 2019-20 to $1,195 last financial year.

Hardship customers of regional power provider Horizon jumped from $859 to $1,547 over the same period.

The ERA notes that average hardship debt is increasing, but there are fewer customers having trouble keeping on top of their bills in total.

The number of customers on hardship programs has decreased, with combined numbers for Synergy and Horizon falling to 24,400 last year compared with 35,000 two years ago.

The proportion of household customers on instalment plans fell in 2020-21 to 4.2 per cent — the lowest rate in six years.

Additionally, the number of customers disconnected for failing to pay their bills is down from 15,014 in 2019-20 to 2,683 across WA thanks to a state moratorium on disconnections. 

The ERA says WA compares well with other states, where customers in hardship have far higher levels of debt and are more likely to be disconnected.

The ERA is introducing changes to enhance safeguards for hardship customers, such as minimum $300 limits on disconnections, easing access to help and providing better protections for victims of family and domestic violence.