Victoria Energy Price Update, who’s cutting prices in 2021?
With a sudden strict four month lockdown it’s safe to say Victorians haven’t had an easy 2020.
But with the Essential Services Commission (ESC) announcing its final energy prices determination for 2021, the new year may already be off to a better start.
The ESC has announced that the Victorian Default Offer (VDO) will fall by 10% for residential customers and 14% for small businesses customers. That equates to a bill reduction of $159 per year and $916 a year, respectively.
As a quick recap, the VDO, which came into effect 1 July 2019, is a default energy offer available to all customers in Victoria who choose to not engage in the energy market - that is, comparing offers and switching plans.
The VDO also replaced standing offers and capped prices, preventing retailers from charging expensive plans to customers on these offers.
“The fall in the default offer is being mainly driven by lower wholesale electricity purchase costs, with lower prices likely to assist many Victorian households and small businesses in recovering from the impacts of the coronavirus pandemic,” said Essential Services Commission pricing director, Marcus Crudden.
The state’s economic regulator estimates that these price reductions will provide some much needed bill relief to around 125,000 households and 40,000 small businesses.
Which retailers are cutting prices?
Energy giants, Origin Energy, AGL and EnergyAustralia have all announced they will be reducing energy prices for their Victorian customers.
From 1 February 2021, the average Victorian household could expect to save about $144 a year on their electricity bill, while small businesses are estimated to save $529 annually.
“As we move into a new year, we're pleased to provide much-needed relief for Victorian households and businesses with their electricity costs,” said EnergyAustralia chief customer officer, Mark Collett.
“In 2021 the average customer that has both electricity and gas with us on variable rate market contracts will be better off overall because of the decrease in electricity rates.”
Effective 1 January 2021, AGL Victorian residential and small business customers on standing offers and variable rate market contracts will experience a decrease of between 5% to 14%.
Residential and small business customers on standing offers will see a reduction of around 10% and 14%, respectively, while those on variable market rate contracts will see a price drop of between 5% - 10.3% for residents and 4% - 12.3% for small businesses.
“While restrictions have now eased, we understand as we move into a new year finances are tight for many households and small businesses,” said AGL chief customer officer, Christine Corbett.
“We hope these reductions will support our customers in focusing on what matters most to them as they recover from the impacts of a challenging year.”
Similar to AGL, VIC residential customers on variable market plans can expect to save 10% ($186) on their annual bill, while VIC small business customers will see savings of 13% ($576) annually.
“Following what has been an incredibly difficult year, it is good to be able to pass on lower electricity prices for our Victorian customers and hopefully provide some welcome hip-pocket relief heading into the new year,” said Origin executive general manager, retail, Jon Briskin.
Other retailers who are also cutting their prices include Alinta Energy and Simply Energy.
Ready to make 2021 the year you save big on your energy bill? Head on over to our energy comparison tool to get started.