Energy Consumers Australia is pleased to submit our feedback to the Essential Services Cpommission’s (ESC) Draft Decision on the Victorian Default offer (VDO).

We support the proposed continuation of the current approach to setting the VDO. We believe this approach has safeguarded consumers on standing offers from unjustifiably high prices, and will continue to do so into the future.

However, we believe there is room for the ESC to investigate further improvements without compromising the benefits that exist for consumers who are engaged in the market: 

• Steps should be taken to avoid information asymmetry and “cost-stack creep” in the calculation of retail costs.
• To account for the information asymmetry, we suggest the application of a productivity factor on retail costs to account for the likely efficiency gains that would be achieved by an efficient retailer.
• We consider there is scope for lowering the retail margin to remain in line with regulatory decisions in ACT and Tasmania.

Read our full submission below.