Victorians could be slapped with electricity price hikes of more than 30 per cent under a proposal put forward by the state’s economic regulator.
The Essential Services Commission on Wednesday released a draft decision proposing a rise in the state’s default offer of about $426 a year for residential customers, pushing typical bills from $1403 to about $1829 annually.
Small business bills would increase by about $1738 a year under the offer, from about $5620 to $7358.
The proposed increases were primarily because of significant rises in wholesale electricity costs driven by the energy market’s volatility in 2022, the commission said.
The deadline for feedback on the draft decision is 11 April, with the commission set to release its final decision by 24 May and the default offer to come into effect from 1 July.
More than 450,000 customers across the state are on the default offer and it is also the maximum amount customers in “embedded networks” – such as apartment buildings and shopping centres – can be charged.
The default offer is a safety net for those who didn’t want to or were unable to engage in the market and won’t directly affect about 85 per cent of customers on retail market offers, commission chair Kate Symons said.
Opposition Leader John Pesutto condemned the offer, saying the Labor government had clearly failed Victorians.
“This shows the government has no plan to reduce power prices, no plan to transition to renewables and no plan to guarantee Victoria’s future energy supply,” he said.
“Victorians should be able to cook dinner for the family, heat and cool their homes and keep the lights on without wondering if they can afford to do so.”
Another round of the state’s $250 power-saving bonus will open on 24 March.
Opposition energy spokesman David Hodgett called on the government to explain how the State Electricity Commission would reduce energy prices and guarantee the state’s future energy supplies.
The Andrews government has flagged roping in the Commonwealth to help fund the re-booted State Electricity Commission.
The state Department of Energy, Environment and Climate Action was in January seeking investment advisors for the revived commission.
The advice would help it leverage investment in renewable projects by partnering with suitable co-investors, developers and financiers, a tender document said.
They could include private investors, superannuation funds and the Commonwealth government.
The electricity commission is pushing to close on a renewables project investment in Victoria this year.
The project should have a suitable co-investor, and be able to be delivered in the next three to five years, the tender stated.
“An objective of the SEC’s foundational deal will be to establish SEC’s credibility as a market participant and to quickly build SEC’s commercial capabilities and processes,” it said.
Labor has pledged an initial investment of $1 billion to deliver 4.5 gigawatts of power through renewables, creating 59,000 jobs and at least 6000 apprenticeships and traineeships.
The State Electricity Commission’s revival was a key Andrews government promise in the lead-up to its thumping November election win.