Proposal to re-regulate energy prices confirms Victorians have been gouged for too long
Victorian energy retailers would be required to provide a new ‘basic service offer’ at a price that will be regulated by the Essential Services Commission, if a proposal by the independent review led by John Thwaites, Patricia Faulkner and Terry Mulder is adopted.
‘For too long, the energy market has been dysfunctional. Energy is an essential service – the proposal to regulate prices could bring an immediate benefit to those who have been ripped off by energy retailers,’ said Gerard Brody, CEO of Consumer Action Law Centre.
The Review recognised problems experienced by disadvantaged and disengaged households, recommending that:
- Late payment penalties masquerading as ‘pay-on-time discounts’ be abolished. Any cost incurred for failing to meet pay-on-time conditions will be capped.
- Where contracts or ‘benefit periods’ end, the price would no longer default to a very high level. Retailers would be required to roll over customers onto a nearest matching offer.
‘Unfair late penalties can be up to $100 if you pay a quarterly bill late. This is the cost of losing the pay-on-time discount’, said Mr Brody.
The Review Panel found that deregulated pricing had added costs, including the costs of marketing, which provide little benefit to customers. Consumer Action welcomed the recognition of market failure and encouraged Government to consider closely the proposal to re-regulate prices.
‘Competition needs to work to benefit customers, and well-designed regulation can support effective competition. We will work with Government so that a ‘basic service offer’ works for all Victorians’.
Other recommendations that would benefit Victorians included:
- Retailers would no longer be able to increase prices at will. They would have to commit to fix prices for a minimum of 12 months.
- Disputes with solar and battery providers would be easier to resolve through the availability of a free and accessible dispute service, the Energy and Water Ombudsman Victoria.
- Concessions and emergency payments for those in severe financial difficulties (utility relief grants) would be reviewed to ensure they are serving consumers who need them most.
- Customers in embedded networks and those with no choice about their gas retailer would also get the benefit of the proposed reforms.