The Victorian Government and local market regulator have defined a default price for electricity offers. This is designed to act as a safety net for customers who don’t shop around and could otherwise be left paying a huge rate.
The reference price was set by the regulator and was launched on 1 July 2019. It will be updated on 1 January each year.
In and out
- In: the Victorian Default Offer is for ‘Anytime’ offers - i.e. single rate tariffs, with or without controlled load.
- In: the Default Offer rates are based on an average annual level of usage that’s set by the regulator. This is 4,000kWh for residential customers and 20,000kWh for small businesses.
- In: Victorian Default Offer rates vary according to which of the five distribution (poles & wires) regions you're in.
- Out: time of use tariffs.
Our price guarantee
It’s worth bearing in mind that if we do have a product designed specifically for solar customers, the cost may work out more than the VDO if the benefit of the solar feed in tariff isn’t taken into account. We never expect that to happen, as it would be unusual for someone without solar to choose a tariff that’s designed specifically for customers with solar 🤷♂️
How it affects you
Thanks to the reference price, we’ll now see an end to the silly and made up discounts such as “47% off your usage charges”, which had become commonplace amongst certain retailers. As has been reported in the media, these offers were often worse for customers than undiscounted offers.
When viewing energy offers in Victoria you may see offers presented as a discount to the VDO. We note that many retailers have chosen not to do this. We reckon they should as it'll make comparisons much easier for customers.
Traps
The VDO is based on a flat (anytime) tariff and an assumed average level of customer usage. This level is set by the regulator. Your usage could be quite a lot more or less than this average level.
Our support
We fully support the principle of default offer pricing. Too long have retailers gamed customers and made huge margins from making up random numbers and often earning upwards of $1400 per year through foregone discounts when customers don’t meet all the necessary conditions.
Energy Locals doesn’t earn money from usage. Instead, we charge a fixed membership amount on a monthly basis. We’re proud to have never played the old school games of big percentage discounts and welcome a more level playing field so that customers can take more informed decisions.