Around 174,000 households and 20,000 small businesses across Victoria buy electricity and gas through private embedded network arrangements. These types of arrangements can prevent consumers from easily switching providers to lower their energy costs.
While the Victorian Default Offer (VDO) serves as a baseline cap for exempt sellers, licensed retailers operating in embedded networks are not bound by this maximum price cap, leading to a significant lack of parity in consumer outcomes.
Additionally, gas embedded networks currently operate without a price cap, and bundled utility services like bulk hot water often feature complex billing arrangements.
To support fairer outcomes for these consumers, our submission calls for a regulatory framework that ensures protections do not depend on where a consumer lives or how their energy is supplied.
We recommend the Victorian Government implement the following key reforms:
- Establish a competitive market-linked price cap, set at the median of active retailers' lowest market offers for both electricity and gas customers.
- Ensure parity of outcomes by applying price caps and consumer rights equally to all embedded network customers, regardless of whether their supplier is an exempt seller or a licensed retailer.
- Reform the regulation of bundled services to bring bulk hot water, unmetered gas cooktops, and centralised climate systems under a transparent disclosure and pricing framework.
