Victorian households will pay about $100 less for electricity, with the state’s regulator lowering its recommended pricing for power companies.
More than 340,000 or 12 per cent of customers on default offers will pay an annual bill of about $1655 from July 1, representing a 6 per cent cut, the Essential Services Commission confirmed on Thursday.
More than 58,000 or 19 per cent of small businesses will pay a $3530 yearly bill, making for a $260 reduction.
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A further 180,000 customers in embedded networks, including apartments and office blocks, will pay no more than the recommended price set by the regulator.
The commission made its decision based on feedback from stakeholders, market data movement and network tariffs approved by the Australian Energy Regulator.
The Victorian Default Offer plays a key role as a benchmark price for market offers and retailers must compare their own offers to the commission’s when advertising.
This year’s lower default offer reflected a reduction in the expected cost of wholesale electricity contracts in the future, the commission’s chief executive Sarah Sheppard said.
“These reductions are offset mainly by an increase in network costs, which reflect a ‘pass through’ of the network tariffs approved by the Australian Energy Regulator,” the report said.
Compared with the 2023-2024 offer, wholesale electricity costs have fallen $143 and network costs have increased $44 on average for domestic customers.
“We heard strong feedback from stakeholders that cost-of-living pressures continue to make it difficult for many in our community,” Sheppard said.
Energy retailers are obliged to inform customers of better offers every three months.
But the Victorian Council of Social Services said the 6 per cent reduction would do little to ease cost pressures.
“This modest reduction will save households about $2 a week and be quickly obliterated by rising expenses like food, rent and petrol,” chief executive Juanita Pope said.
“Given last year’s decision increased baseline bills by $352, prices are still going in the wrong direction.”
Victorian Energy Minister Lily D’Ambrosio said it was a fantastic outcome.
“It’s $311 less than what was announced by the Australian Energy Regulator … for the default market offer that applies on average right across the rest of national electricity market,” she told a budget estimates hearing on Thursday.
The Essential Services Commission was scheduled to address media later on Thursday morning.