The Victorian Government has announced a raft of changes to the Energy Industry, that will give customers an opportunity to both save and have more transparency when dealing with their retailer – which is great news for all homes and small businesses. The biggest change is the introduction of the Victorian Default Offer.
So, in this blog, we will walk you through these changes and what they could mean for you.
Firstly a bit of background on why the changes have been brought about.
In 2018, the Essential Services Commission conducted a review into the industry, producing the Electricity and gas retail markets review implementation 2018 (bills and marketing) report. A range of new measures were identified and discussed at length with industry stakeholders before being submitted to the government for legislative change.
These changes came into effect 1 July 2019.
Summary of changes
|‘Best offer’ information for energy consumers||Retailers must tell customers on their bill whether they’re on the best energy plan and how much the customer could save by switching, at least quarterly for electricity bills, and at least every four months for gas bills.|
|Clear advice before you sign a new energy deal||Retailers will help customers navigate to a product that best suits their circumstances.|
|Fact sheets for consumers||All plans will have a fact sheet that shows the expected average yearly cost of the plan for a number of typical households.|
|Prior warning of bill changes||Retailers will be required to notify customers at least five days prior to price or benefit changes that will affect the customer’s bill. When they do this, energy retailers must include a ‘best offer’ message telling customers whether a cheaper plan is available, and how much the customer could save by switching.|
|Customer read estimates||Customers that receive an estimated bill will be able to request an adjustment to their bill by submitting a self-read of their meter prior to the bill due date.|
Source: Essential Services Commission.1
How will this affect me, and what is the VDO?
The most important change from our perspective is the first one: ‘’Best offer’ information for energy consumers’
All Victorians will have access to the Victorian Default Offer (VDO), which is set by the government for your area on July 1, but there are some exceptions which you can read about here.
Retailers will be obligated to regularly tell you if you are on their best offer – which may be the VDO, or a cheaper market offer that your retailer may have negotiated. The retailer is also obligated to find a plan that best suits your needs.
This means you will always be on the cheapest offer that THEY can give you.
Whilst this is fantastic news and will mean that (the vast majority of) an estimated 130,000 customers that are currently on the worst plans will make some savings, there is a catch.
All retailers are different. Those negotiated market offers we mentioned above are often cheaper than the default, are exclusive to that retailer only, and new ones come onto the market all the time.
So while you can rest easy knowing you can more easily be on the cheapest plan from YOUR retailer, Energy Umpire can ensure you are on the cheapest plan available to you from ALL of the retailers. All of the time.
Let’s look at a quick example. For a family of 4 currently on a Standing Offer with Citipower2, their annual bill total would be $2080. If we apply the Victorian Default Offer to this plan, their annual bill drops to $1930. So our family would be saving $150, which is not insignificant to be fair.
But we can do better! Based on our comparison, our family of 4 could be saving much more than this if they swap to the cheapest plan for their needs on the market. The Best Plan, as found by our Umpires, would cost $1393 per year that is a saving of $687!!!
And, by joining Energy Umpire Pro, we will check you are on the cheapest plan every time your bill comes in. All for the cost of a coffee a month for electricity or gas (or a little more for both).
Not much for peace of mind. Why not check us out.
1.Source:Electricity and gas retail markets review implementation 2018 (bills and marketing)
2.Example is based on a household of 4, with Citipower, using the industry average of 5810Kwh per year. Comparison is for best plan identified by Energy Umpire, using the same industry standard and situation.