Next steps for the Victorian Default Offer

Consumer Action Law Centre welcomes the opportunity to comment on the Essential Services Commission’s (the Commisson) consultation paper Next steps for the Victorian Default Offer.

These comments relate to the approach to vary the Victorian Default Offer (VDO). The Consultation Paper notes the objective of the VDO is to provide a simple, trusted and reasonably priced electricity option that safeguards consumers unable or unwilling to engage in the electricity market.

As the Commission has previously noted, this has also been described as ‘universal access to a fair priced electricity offer’. Consumer Action considers that fairness and community expectations demand that the VDO be set at no more than absolutely necessary to ensure bills remain affordable, particularly for those who are unable to effectively
engage in the market.

We support the Commission using the variation mechanism to adjust prices for the VDO to account for changes in network tariffs. However, we also believe the VDO could be further reduced including through adjustment of wholesale costs which form the second biggest component of the VDO after network costs.

We also urge the Commission to remove the temporary ‘bad debt’ provision. Our position is that the bad debt provision should never have been included in the VDO.

Read our full submission (PDF)

210524 Submission – VDO variation
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