The Essential Services Commission has shared their concerns regarding media reports that energy retailers were using an increase to the 2020 Victorian Default Offer (VDO) to justify broader price rises across electricity plans.
The ESC’s decision on the state’s 2020 default price was released in November 2019, with an average price increase for households and businesses of about 7.8 per cent ($110 for households, $465 for small business).
ESC chairperson Kate Symons said that the increase was due to rising forecast wholesale prices and network costs, but that customers should remember that they could do better than the VDO.
“There are better market offers available – but if a customer wants a ‘simple and reasonably priced’ option, they can trust the VDO.
“We have set a price which reflects an independent and rigorous assessment of the efficient cost of selling electricity – a fair price, which is set by the regulator, not the retailer,” she said.
Following the release of the increased VDO pricing for 2020, Origin Energy released a statement outlining their pricing changes for 2020.
Origin Retail Executive General Manager, Jon Briskin, said, “Origin’s electricity prices will change on 1 January for residential and small business customers on the Victorian Default Offer in line with changes announced by the Essential Services Commission.
“Origin residential customers in Victoria on discounted market offers will also receive a price change that aligns with the changes to the VDO as announced by the regulator.”
In a statement, the ESC said it was “concerned” by reports that energy retailers are confusing customers and justifying price increases based on the VDO for 2020; and that they were following up on these reports.
The ESC also moved to remind customers that energy companies are free to set prices for market contracts; and that the commission does not regulate market offers – therefore any decision to increase market offers is a business decision, rather than one linked to the VDO.