The Victorian Default Offer (VDO) is a rate for electricity replacing all standing offers with flat tariffs which are higher than the VDO in Victoria.
It is independently set by the Essential Services Commission (ESC) and all electricity retailers must make this available to their Victorian customers. From 1 January 2020, the VDO price will cover all standing offers, including time-of-use, demand and flexible tariff structures.
The VDO was brought in to combat some of the shady behaviours some retailers were displaying by letting loyal customers’ contractual benefits expire and moving them onto a deal that was not as good as the relevant retailer’s current market offers.
At Powershop, we’re happy to say that all our customers are treated fairly, so we had no active customers moved on to the VDO when it came in. Of course, customers can be placed on the VDO on request.
What has changed is that it has forced those retailers who were acting unfairly to treat their customers better. As one of the first signatories of the Energy Charter – a cross-industry initiative to improve outcomes for energy consumers – we are really pleased that the introduction of the VDO has had this effect.
From 1 January 2020, the ESC has announced that it is increasing the VDO for residential customers by 7.8%. Most of Powershop’s market offers will continue to be more competitively priced than the VDO.