To date, we believe that the Victorian Default Offer (VDO) has been successful in achieving the policy objective of providing consumers unable or unwilling to engage in the market with a simple, trusted and reasonably priced electricity option. However, given the cost-of-living pressures Victorians are currently facing, it is critically important that the VDO continues to deliver against this objective in the coming regulatory period.
While we have been and remain supportive of the VDO, we recommend a meaningful reduction to the proposed 31% increase in the 2023-24 VDO price. We acknowledge that high wholesale electricity prices across the past 12 months necessitate an increase from the previous VDO, however, we suggest that the ESC reconsiders several aspects of its draft decision to ensure that any price rise is minimised, particularly in the context of provision of essential services. These aspects include review of the wholesale cost methodology, and smaller changes to the calculations of retail operating costs and retail margin. More detailed comments on these points are provided in our submission.
Read the full submission (PDF).230405 ESC VDO 2023-24 Draft decision (2)