The proposed regulated energy price submitted to the Victorian Government will come at the cost of competition and cheaper deals for households, the energy industry has warned.
The Essential Services Commission has released its advice to the Victorian Government on the introduction of a Victorian Default Offer, a tariff designed to replace the standing offers that 6 per cent of Victorians are currently on. However the Default Offer, to come into effect on 1 July, risks shrinking the market, reducing the number of cheaper deals and forcing smaller retailers out of the market. It also risks product innovation and ultimately future investment in Victoria’s energy market.
“The energy experts, the Australian Energy Market Commission, advised the COAG Energy Ministers against this kind of price re-regulation last December. This is because, while it might benefit a very small minority of retail customers who have not shopped around and who are on standing offers, it risks damaging competition and with it the cheaper market offers that the majority of households currently enjoy,” AEC Chief Executive Sarah McNamara said.
“The AEMC found that customers on lower priced market offers are likely to be worse off – in Victoria more than 94 per cent of households are currently on market offers.”
About the Australian Energy Council
The Council represents 23 major electricity and downstream natural gas businesses operating in competitive wholesale and retail energy markets. These businesses collectively generate the overwhelming majority of electricity in Australia and sell gas and electricity to over 10 million homes and businesses.
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