The Victorian state government’s energy reforms (introduced 1 July 2019) are making is easier for customers to get a better deal on energy. These reforms are particularly important for low-income customers who struggle to engage with the retail energy market.
Some of the changes include:
Victorian Default Offer (VDO): The VDO is a regulated price, determined by the Essential Services Commission, which replaces all ‘standing offers’ from 1 July 2019. That is, customers who are on standing offers (which are generally more expensive than market offers), must automatically be switched to the VDO price in their distribution area.
Best offer entitlement: Energy retailers must provide a written notification on their customer’s bill, advising the customer if they have a better plan available – and how much the customer could save by switching to that plan. These notifications must be provided at least quarterly for electricity bills, and at least every four months for gas bills.
Prior warning of bill changes: Retailers must notify customers at least five days before a price change, or the end of a customer’s ‘benefit period’ (i.e. when their ‘low introductory price’ ends), to let the customer know their price is changing. At the same time, retailers must include a ‘best offer’ message if they have a better plan for the customer – and let them know how much they could save by switching.
Clear advice entitlement: Retailers must provide useful, clear advice to customers who contact them to switch to a better offer. For example, this may include advice that a customer will only make a saving on a ‘best offer’ if they are able take advantage of a pay on time discount.
Fact sheets for customers: All energy retailers must use standardised fact sheets with basic information about their plans for quick reference so customers can easily compare their plan with others on the market. The fact sheets must show the expected average yearly cost for a number of typical customer households. The fact sheets must also be linked to the ‘back end’ of the Government energy comparison site, Victorian Energy Compare.