The announcement of the final Victorian Default Offer (VDO) price will come as welcome relief for households and small businesses but should also act as an important prompt for households and businesses to shop around for better electricity deals, according to the peak body for electricity retailers.
The Australian Energy Council's interim Chief Executive, Ben Barnes, said, "Today's decision is a good outcome for customers, but I'd encourage households that are looking to save money to not wait for the new default offer which will come into effect on 1 July. You can check online at Victorian Energy Compare (compare.energy.vic.gov.au) or ring your retailer because there are cheaper deals available.
"The regulated price is designed to be a safety net for around 13 per cent of customers who aren't currently on competitive deals in Victoria. Unfortunately, while the VDO is not the cheapest deal in the market, the risk is many people may think it's the best option. That's why we encourage people to shop around."
Mr Barnes said the reduction in the VDO was largely the result of lower wholesale prices, partly offset by higher network and other costs. Network and wholesale costs make up 36 per cent and 30 per cent respectively of the latest VDO average bill of $1655.
"We welcome the Essential Services Commission's use of a consistent methodology in setting the VDO, which builds confidence in the model and enables retailers to plan appropriately and develop their market offers."
Mr Barnes said energy retailers were ready to work with the Federal Government to ensure the smooth rollout of the bill relief announced in the budget. The Federal Government has announced households will receive $300 and small business $325 next financial year, paid in quarterly instalments.
"In this high-cost environment, getting assistance directly to customers via their power bills is the most effective way for the Government to make a difference," Mr Barnes said.
"This quarterly rebate should ease some of the pressures on households, but customers should be aware that their energy provider also has a range of support options available, such as payment plans and hardship programs, for those who are having difficulty paying their energy bills. If you need further help, contact your retailer as early as possible to get the support you need."
About the Australian Energy Council
The Australian Energy Council is the peak industry body for electricity and downstream natural gas businesses operating in the competitive wholesale and retail energy markets. AEC members generate and sell energy to 10 million homes and businesses and are major investors in renewable energy generation. The AEC supports reaching net-zero by 2050 as well as a 55 per cent emissions reduction target by 2035 and is committed to delivering the energy transition for the benefit of consumers.
