The Essential Services Commission has made a final decision and price determination on Victorian Default Offer prices to apply from 1 January 2021 for customers on electricity standing offers.
The final decision was released on 27 November 2020. This project is now closed for consultation.
Key facts about our final decision
- The average annual bill for Victorian default offer customers will fall by ten per cent for residential customers and 14 per cent for small business customers in 2021. This is mainly due to forecast decreases in wholesale electricity and network costs.
- We used generally the same approach and methodology we used in our determination on the 2020 Victorian default offer. However, we have accounted for the effect of the coronavirus pandemic on retailers’ costs by increasing our allowance for bad debts.
- Our determination is for a 12-month regulatory period starting 1 January 2021. However, when the Australian Energy Regulator approves network tariffs for the second half of 2021, we will consider how best to reflect network tariffs in Victorian default offer prices. If there are material changes to the structure of tariffs we will consult further with stakeholders.
How we engaged
Engaging with stakeholders during the coronavirus pandemic meant we adapted our approach to the needs of stakeholders. We made it easier for stakeholders to have their say in this environment. Activities we undertook included:
- asking key questions about our approach in our consultation paper
- promoting discussion in our online public forums where we heard from consumers and businesses
- answering questions that came to us through our Engage Victoria virtual public forum and
- requesting and receiving submissions on our consultation paper and our draft decision.
What we did with your feedbackFeedback on our draft decision led to changes in our final decision. Further detail on our responses to submissions can be found in our final decision document.
We considered all feedback from stakeholders in making our determination, balancing this with the relevant provisions and matters we must have regard to under the Essential Services Commission Act 2001, Electricity Industry Act 2000 and the pricing order.
Read our final decision
The Essential Services Commission is an independent regulator that promotes the long term interests of Victorian consumers with respect to the price, quality and reliability of essential services. We regulate Victoria’s energy, water and transport sectors, and administer the local government Fair Go Rates system.
The commission is responsible for setting the Victorian Default Offer prices. These prices are designed to be a simple, trusted and reasonably priced electricity option that safeguards customers that are unwilling or unable to engage in the market. Each year the Victorian Government has required the commission to review the prices it has set to make sure they are based on efficient costs and continue to provide a safeguard to consumers.