How new proposal could give energy customers a fairer deal
A potential crackdown on energy bill price gouging could offer big savings to tens of thousands of Victorians living in apartments, caravan parks and retirement villages. See what’s being proposed.
VIC News
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More than 100,000 Victorians living in apartments, caravan parks and retirement villages could save hundreds of dollars a year on electricity bills under a proposed crackdown on price gouging.
The state’s energy regulator is proposing to cap the amount embedded network customers can be charged at no more than the Victorian Default Offer.
Essential Services Commission pricing director Marcus Crudden said residents could save $180 to $370 annually, depending on their location.
Small businesses could save $900 to $2200, he said.
Mr Crudden said most embedded network customers were now locked into paying expensive rates because they had limited ability to shop around for better deals.
Unlike other customers, they were typically trapped on contracts determined by body corporates and privately owned and managed electricity networks.
Mr Crudden said increasing numbers of Victorians were at the mercy of embedded network charges as more people moved to apartment living.
“Victorians living in embedded networks will be able to access a fairer deal under our proposed new maximum price,” Mr Crudden said.
“Customers currently in these networks are not fully covered by the same price protections as other Victorians and this changes that.”
The proposed new maximum price cap would take effect from September 1 this year.
The default offer is an independently regulated price that is not the cheapest on the market, but considered to be a fair, reasonable and efficient charge.
It is considerably lower than the current embedded network customer maximum price cap, which is linked to notoriously expensive “standing offers”.
“It will bring their maximum prices in line with the Victorian Default Offer, which was established to ensure there is a simple and fair electricity price available,” Mr Crudden said.
“A lot of embedded network customers were unhappy that they were not covered by the VDO when it was introduced last July.”
Under the plan, embedded network customers could still be offered deals below the maximum price.
About 104,000 residential, caravan park and retirement village customers, and 18,000 businesses, are in embedded networks statewide.
Submissions on the draft decision will be accepted until June 15.
A final ruling is due in July.
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