Victorian Default Offer price determination protects everyone’s right to a fair price for electricity in 2020

Consumer Action Law Centre (Consumer Action) welcomes the Essential Services Commission’s (ESC) announcement of ongoing price protection for household electricity supply in Victoria.

The Victorian Default Offer (VDO) is a price for electricity that is independently set by the ESC. All households in Victoria have a right to access the VDO and this offer ensures that they are not being gouged by electricity retailers.

Today the Essential Services Commission in Victoria released its decision to limit increases for the Victorian Default Offer price from January 2020 so that they only reflect increases in underlying costs.

“Electricity is an essential service, and it is important that we are not ripped off when using electricity to keep our home at a healthy temperature or when running the washing machine,” says Consumer Action CEO Gerard Brody.

“Since the Victorian Default Offer was introduced in July 2019, well over 100,000 households have been protected from paying over $200 extra a year on average for the electricity and the price determination continues to provide that protection.”

The VDO will increase on 1 January 2020, by an average of approximately $100, driven primarily by an increase in the cost of wholesale electricity as well as the cost of poles and wires.

“While the 2020 VDO price will still be less than the average electricity prices prior to its introduction on 1 July this year, it’s essential that governments and regulators work to keep costs down across the supply chain, during this time of transition to a low-emission and reliable energy system”, said Mr Brody.

Brody encourages the Victorian Government to now build on the success of VDO and introduce a similar price protection in gas.

“Gas rates are more complex and have been on the rise. The Government has the power to implement a regulated price protection for gas and should do so to stop us from being ripped off.”

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