Electricity Charges – Victorian Default Offer | Constituency Question & Response

My constituency question is directed to the Minister for Energy, Environment and Climate Change and Minister for Solar Homes, the Honourable Lily D’Ambrosio, MP. My question relates to the minister’s portfolio responsibilities for energy, environment and climate change.
The Andrews Labor government has announced that the maximum price which embedded network customers can be charged for their electricity will be set to the Victorian default offer—which the government set as a fair price across the state.
Many residential and small business customers live or work in embedded networks across Victoria. Customers in embedded networks are locked into a contract with a specific company, and these companies can act as a monopoly and charge higher prices for energy. The announcement, which fulfils part of an election commitment, follows a decision by the Essential Services Commission to set the Victorian default offer as the maximum price for these customers. This is part of the suite of government reforms
through the energy fairness plan to make energy more affordable for all Victorians. My question to the minister is: can the minister advise how the constituents in my area of Western Metropolitan Region will benefit from this announcement?


In reply to Ms VAGHELA (Western Metropolitan) (1 September 2020)

Ms D’AMBROSIO (Mill Park—Minister for Energy, Environment and Climate Change, Minister for Solar Homes):

Thank you for raising this important matter with me. From 1 September 2020, the maximum price which embedded network customers can be charged for their electricity will be set to the Victorian Default Offer.

With this new pricing cap, constituents in the Western Metropolitan region that are residents of apartment buildings, rooming houses, caravan parks and retirement villages could save between $180 and $370 a year on energy bills, while small businesses in shopping centres could save between $900 and $2,200.

In addition, a proposed reduction in the Victorian Default Offer for 2021 could see a drop in yearly electricity bills of 9% for Victorian small businesses and 7% for households. That’s $575 a year for small business and $105 a year for households. This follows the Andrews Labor Government introducing the Victorian Default Offer in 2019, to give customers fairer deals on energy bills on 1 July 2019.

The price cap will provide these customers with price protections that are as consistent as possible with those applying to customers who are able to access market offers.

This change is part of the Victorian Government’s ongoing work to improve customer outcomes and fairness for embedded network customers in Victoria. New measures introduced by the government include the Payment Difficulty Framework, which has nation-leading protections to keep vulnerable people connected.

Victorians are also able to access cheap and clean renewable energy through our landmark $1.3 billion Solar Homes program, supporting 770,000 households to get solar PV, solar hot water and batteries at no upfront cost while creating 5,000 jobs.