Consumer Action Law Centre (Consumer Action) commends the Essential Services Commission’s (ESC) draft advice to the Victorian Government about the default regulated price for electricity, but urges retailers to follow suit.
The Victorian Default Offer (VDO) is set to apply in Victoria from 1 July. The prices proposed in the advice are much lower than many of the so-called ‘deals’ electricity businesses in Victoria are offering their customers—especially the jacked-up prices people are charged for late payment, marketed as ‘discounts’ for paying on time.
Consumer Action CEO, Gerard Brody says the VDO is a great step forward toward making the energy market fairer and more accessible for Victorians since the mess created by price deregulation in 2009.
“Price deregulation has ripped off those who are struggling to make ends meet,” he says. “The number of households disconnected have skyrocketed.
“Energy retailers have created a mess and not acted in the interests of their customers. Their profits have soared.”
He commended the ESC for acting to discipline a market that has clearly failed to deliver fair prices for Victorian Households.
“Prioritising the Victorian Default Offer means that a fairer independently-set electricity price will be available to all Victorian households on 1 July 2019.”
But, Brody says there is still work to be done. While the small proportion of households on the current default ‘standing offers’ will soon save money on a VDO price, the Government must ensure all those paying a much higher rate than the VDO because of traps in legacy contracts do not continue to be ripped off.
He urges energy retailers to adjust their prices for all customers so that no one is paying higher than the VDO.
Brody also urges the ESC to ensure that marketing costs associated with practices soon to be banned by the Government not be included in the VDO price.
“The cost of telemarketing & door-knocking should be removed given the government will ban these activities.”
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