The Essential Services Commission (ESC) has listened to consumer groups’ calls for a reduction of the proposed increase to the Victorian Default Offer (VDO) for energy in Victoria. However, today’s announcement of a 25% increase in the VDO will be challenging for Victorian households already struggling with rising costs of living.
For an average household, the 25% increase will amount to an extra $350 per year on their energy bill. The ESC was initially proposing a 31% increase for households on the VDO, but in a welcome development have revised this down upon further review. The new prices will come into effect from 1 July 2023.
The VDO is the default price for electricity that is independently set by the ESC. Most households in Victoria can access the VDO, and anyone can use it to compare against market offers to ensure they are getting a good deal. The ESC reviews the VDO price annually.
“This will be a difficult announcement for the people calling our frontline services who tell us they cannot weather another significant increase to the cost of living,” says Stephanie Tonkin, CEO Consumer Action.
“Every day our financial counsellors speak with people who are struggling and simply have no buffer to absorb further price rises on their essential services. Today’s decision will cause households to switch off their heating during winter to get by. Now that we have the VDO decision, Government and energy retailers must take action to ensure households are accessing the best energy price, and all eligible concessions and hardship options.”
“If people are struggling to afford their utility bills, or any other debts, I urge them to call the National Debt Helpline on 1800 007 007 and speak to one of our financial counsellors. They can give you free, independent, and confidential information on hardship options available to help you manage your debts,” concluded Ms Tonkin.