Wholesale energy upheaval should not push default electricity prices higher
The Consumer Action Law Centre (Consumer Action) has written to Kate Symons, Chairperson of the Essential Services Commission (ESC), urging caution before accepting electricity retailer arguments to re-open the Victorian Default Offer (VDO).
The VDO is the default rate for electricity prices set by the ESC and introduced by the Victorian Government after an independent review of energy prices found that Victorians were paying too much for their energy.
“Wholesale electricity prices have been volatile and high in recent months, and this may be putting pressure on some retailers, but we are concerned about the cost-of-living pressures facing families and people experiencing vulnerability,” said Gerard Brody, CEO Consumer Action.
Many Victorians are contacting the National Debt Helpline with concerns about how they will pay for the rising cost of living, including any increases in the price of energy.
“Electricity retailers are meant to be managing the risk of volatile wholesale markets on behalf of their customers. If some retailers have not managed risk appropriately, that should not justify an increase in default prices.
“Higher interest rates and rising costs across many consumer goods and services are causing new and added stress to households, particularly among households on low or fixed-incomes, or otherwise in vulnerable circumstances,” Mr Brody said.
In the letter, Mr Brody says the Commission has previously described the purpose of the VDO as being to ‘provide customers with universal access to a “fair” price’.
“We question how it is fair that consumers are now expected to unilaterally wear the cost of issues in the energy market. Electricity is the most essential of services—in the setting of prices, it is fundamental that the interests of consumers are placed the viability of particular energy businesses.
“If there are to be additional costs imposed on households, then we also urge consideration of fairness as to how they are applied across the community,” Mr Brody said.
Read the full letter to Ms Symons.
ENDS
Media contact: Mark Pearce, Media and Communications Adviser, 0413 299 567, media@consumeraction.org.au
