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Consumer Action Law Centre welcomes the opportunity to comment on the Essential Services Commission’s Draft Decision: Victorian Default Offer from 1 January 2022 (the draft decision).

The draft decision paper states 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.

Overall, we are pleased to see that the VDO will decrease on average for residential customers. We know through our case work that many Victorian households find electricity costs unaffordable and decreasing prices should be welcome news.

We are strongly supportive of the decision to remove the temporary bad debt provision. We believe this should never have been included in the VDO. We are supportive of the approach to calculating wholesale costs over 12 months as this should better reflect actual costs worn by retailers and work in the long-term interest of Victorian consumers.

We also provide comment on the Victorian Energy Upgrades program and how this factors into the VDO price. Recent legislative reforms in Victoria will see the banning of unsolicited selling of energy and restrictions on other marketing practices. We believe that costs associated with these marketing practices should be removed from the VDO.

Read our full submission (PDF).