New default offer to bring power bill relief to Victorians

Thousands of Victorian households will have their power bills slashed under a new default offer as they begin the new year.

Thousands of Victorian households have greeted the new year with some much-welcome power bill relief.

Thousands of Victorian households have greeted the new year with some much welcome power bill relief as a new, lower default offer takes effect.

The changes will result in households being charged the default offer, which will save about $70 a year on their electricity bill.

The savings for the average small business are expected to weigh in at $336 a year.

The lower prices follow the energy regulator cutting the default offer by about 6 per cent in November following a fall in wholesale electricity prices.

The lower charges, which will provide bill relief to about 200,000 households and 50,000 small businesses, came into effect on January 1.

The default offer is a government-mandated electricity offer and serves to cap the amount an energy retailer can charge a customer on a standing offer.

Origin has passed on a small decrease in electricity prices to Victorian customers on its standing offers, which are already priced below the default offer.

EnergyAustralia says Victorian customers on standing offers will have their plans updated in line with the default offer.

It has lowered standing offer prices by about 3.5 per cent in a move set to save the average household aabout $52 a year and the average small business about $105.

AGL said it had cut electricity prices for customers on standing offers in Victoria by an average of 5 per cent for households and 6 per cent for small business.

Some Victorian customers on a variable plan will get a 2 per cent cut in February, the energy giant said.

EnergyAustralia said Victorian customers on standing offers would have their plans updated in line with the default offer but did not provide any more detail around the savings.

St Vincent de Paul Society spokesman Gavin Dufty said while any reduction in energy costs was always welcome, the cut to the default offer followed it being raised in September.

“It’s great news but unfortunately from the September to December period it went up significantly and that corresponded at a time when people were in lockdown so household consumption was up,” he said.

“It’s come down but it went up first.”

The social charity is bracing for a rise in utility bill pain this year following the ending of Covid-related government support measures and disconnection moratoriums.