Affordability and Equity


Electricity is an essential service and ensuring that all of our customers and communities have equal access to dependable and resilient energy supplies is an important priority. This is especially critical in the current environment, marked by rising electricity and gas bills, and economic pressures.


Residential Victorian Default Offer

Network charges are typically shown on your electricity bill as part of the ‘supply charge’. In Victoria, the Essential Services Commission sets a standard electricity price called the Victorian Default Offer (VDO). While electricity retailers can charge a higher or lower price than the VDO, it acts as a useful reference for prices. According to the Essential Services Commission, the VDO is 25 per cent higher than it was a year ago.

The price you pay for electricity consists of many components. Our distribution and metering tariffs cover the cost of all the network services we provide and make up about a third of the average electricity bill.

The parts of a bill relate to the costs of:

  • making the electricity (wholesale generation)
  • transmission (moving the electricity across large distances and at high voltage)
  • retail charge for the electricity you consume, and the retail margin charged by the company that sends you the bill
  • environmental levies (five different federal and state levies).


Residential Victorian Default Offer 2023-24 (based on 4,000kWh per annum)



Whilst you cannot switch networks, rest assured that you are receiving value for money. In fact, Powercor is proud to be the most affordable network servicing regional and rural areas.


Line graph comparing the annual network charges for Australia's electricity networks. The graph shows that CitiPower is the second cheapest and Powercor is the fifth cheapest against all 13 networks.Typical Residential Customer Network Charges per annum 2023-24



Impacts to equitable access

Customers' access to electricity can be impacted for many reasons. All of these issues are important for us to consider in how we develop our network tariffs that make up the distribution and metering charge on a bill.

  • Geographic location: regional and rural customers pay a higher price for network charges than people in the city, but they can also experience supply outages more often and for a longer time. Some customers may also live at the end of a power line and can receive a lower quality of electricity supply. Many rural and regional customers are also unable to access the renewable energy produced in their communities, while others feel unable to fully embrace renewable technologies because of limitations with their local power supply and infrastructure.
  • Vulnerability: many experience barriers to accessing or engaging in the electricity market. As a result of those barriers, they may experience economic and or social exclusion or harm. Barriers can include illness, job loss, financial stress, family violence, death of a loved one, ageing and disability, or a natural disaster. They can also include complex social issues such as unaffordable or poor-quality housing, employment insecurity, access to digital living and the emergence of a digital divide, regional limitations, low income, or racism.
  • Investment ability: for some it's not possible to participate in the transition to renewable energy - purchasing or access new technologies such as solar panels, battery storage, electric vehicles, or even more efficient appliances. This isn’t always because of financial reasons, for example, renters and people living in
    public housing, are often not able to install new technologies as they are not the property owner, or old Victorian homes may not be able to support solar on the roof.
  • Generational equity: transitioning to renewable energy in the network is costly. Generational inequality may occur if people do not want to pay for electricity upgrades now, but in the future. This means that the next generation may inherit continuing high costs.


Customer and stakeholder engagement

Equity

At customer engagement forums during our broad and wide engagement phase, customers made it clear they support a more equitable approach to electricity distribution. For example, they would like us to:

  • develop more equitable outcomes between rural and urban customers experiencing higher costs, or poorer reliability
  • ensure the financial burden of transitioning to clean energy does not fall unfairly on certain groups
  • make grid resilience improvements equal, focusing on those living in rural and regional areas, and vulnerable customers
  • support customers who cannot access the benefits of technologies such as solar or electric vehicles (EVs)
  • adopt price structures that consider diverse customer needs.

Customers are increasingly driving the energy transformation through investments in customer energy resources - resources that can generate or store power for customers such as solar photovoltaic (PV), battery technologies and residential electric vehicles (EV). However, results from the Energy Consumers Australia Behaviours Survey (October 2023) showed that the number of people who are considering the purchase of an EV, battery storage system or solar panels (either within 12-months or longer term) is between 17 to 24 per cent. These results indicate that there are barriers to accessing these technologies.


Affordability

Customers also told us that maintaining our current service levels, while at the same time investing for the future, is expected. The challenge for us is to deliver this at the lowest cost that we can.

Therefore, we work closely with our customers, stakeholders, and other Victorian distributors on how we can keep costs as low as practical. We also look for ways to support our more vulnerable customers.

There have already been a wide range of suggestions proposed by our customers in initial consultations on the 2026–2031 Regulatory Reset. This ranged from subsidised solar and storage, an ‘essentials tariff’, tariffs based on ability to pay, greater education on usage, more support for community based microgrids and standalone networks, to fairer way of recovering electricity infrastructure investments that benefit all Victorians.

While not all these opportunities are within our direct control, we are committed to exploring ways to support vulnerable customers to ensure no one is left behind as the energy system transition to greener forms of electricity.


To see how we are currently engaging with customer and stakeholders on this theme, visit the Focused Conversations page.


Explore the other themes


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Back to Regulatory Reset main page


Electricity is an essential service and ensuring that all of our customers and communities have equal access to dependable and resilient energy supplies is an important priority. This is especially critical in the current environment, marked by rising electricity and gas bills, and economic pressures.


Residential Victorian Default Offer

Network charges are typically shown on your electricity bill as part of the ‘supply charge’. In Victoria, the Essential Services Commission sets a standard electricity price called the Victorian Default Offer (VDO). While electricity retailers can charge a higher or lower price than the VDO, it acts as a useful reference for prices. According to the Essential Services Commission, the VDO is 25 per cent higher than it was a year ago.

The price you pay for electricity consists of many components. Our distribution and metering tariffs cover the cost of all the network services we provide and make up about a third of the average electricity bill.

The parts of a bill relate to the costs of:

  • making the electricity (wholesale generation)
  • transmission (moving the electricity across large distances and at high voltage)
  • retail charge for the electricity you consume, and the retail margin charged by the company that sends you the bill
  • environmental levies (five different federal and state levies).


Residential Victorian Default Offer 2023-24 (based on 4,000kWh per annum)



Whilst you cannot switch networks, rest assured that you are receiving value for money. In fact, Powercor is proud to be the most affordable network servicing regional and rural areas.


Line graph comparing the annual network charges for Australia's electricity networks. The graph shows that CitiPower is the second cheapest and Powercor is the fifth cheapest against all 13 networks.Typical Residential Customer Network Charges per annum 2023-24



Impacts to equitable access

Customers' access to electricity can be impacted for many reasons. All of these issues are important for us to consider in how we develop our network tariffs that make up the distribution and metering charge on a bill.

  • Geographic location: regional and rural customers pay a higher price for network charges than people in the city, but they can also experience supply outages more often and for a longer time. Some customers may also live at the end of a power line and can receive a lower quality of electricity supply. Many rural and regional customers are also unable to access the renewable energy produced in their communities, while others feel unable to fully embrace renewable technologies because of limitations with their local power supply and infrastructure.
  • Vulnerability: many experience barriers to accessing or engaging in the electricity market. As a result of those barriers, they may experience economic and or social exclusion or harm. Barriers can include illness, job loss, financial stress, family violence, death of a loved one, ageing and disability, or a natural disaster. They can also include complex social issues such as unaffordable or poor-quality housing, employment insecurity, access to digital living and the emergence of a digital divide, regional limitations, low income, or racism.
  • Investment ability: for some it's not possible to participate in the transition to renewable energy - purchasing or access new technologies such as solar panels, battery storage, electric vehicles, or even more efficient appliances. This isn’t always because of financial reasons, for example, renters and people living in
    public housing, are often not able to install new technologies as they are not the property owner, or old Victorian homes may not be able to support solar on the roof.
  • Generational equity: transitioning to renewable energy in the network is costly. Generational inequality may occur if people do not want to pay for electricity upgrades now, but in the future. This means that the next generation may inherit continuing high costs.


Customer and stakeholder engagement

Equity

At customer engagement forums during our broad and wide engagement phase, customers made it clear they support a more equitable approach to electricity distribution. For example, they would like us to:

  • develop more equitable outcomes between rural and urban customers experiencing higher costs, or poorer reliability
  • ensure the financial burden of transitioning to clean energy does not fall unfairly on certain groups
  • make grid resilience improvements equal, focusing on those living in rural and regional areas, and vulnerable customers
  • support customers who cannot access the benefits of technologies such as solar or electric vehicles (EVs)
  • adopt price structures that consider diverse customer needs.

Customers are increasingly driving the energy transformation through investments in customer energy resources - resources that can generate or store power for customers such as solar photovoltaic (PV), battery technologies and residential electric vehicles (EV). However, results from the Energy Consumers Australia Behaviours Survey (October 2023) showed that the number of people who are considering the purchase of an EV, battery storage system or solar panels (either within 12-months or longer term) is between 17 to 24 per cent. These results indicate that there are barriers to accessing these technologies.


Affordability

Customers also told us that maintaining our current service levels, while at the same time investing for the future, is expected. The challenge for us is to deliver this at the lowest cost that we can.

Therefore, we work closely with our customers, stakeholders, and other Victorian distributors on how we can keep costs as low as practical. We also look for ways to support our more vulnerable customers.

There have already been a wide range of suggestions proposed by our customers in initial consultations on the 2026–2031 Regulatory Reset. This ranged from subsidised solar and storage, an ‘essentials tariff’, tariffs based on ability to pay, greater education on usage, more support for community based microgrids and standalone networks, to fairer way of recovering electricity infrastructure investments that benefit all Victorians.

While not all these opportunities are within our direct control, we are committed to exploring ways to support vulnerable customers to ensure no one is left behind as the energy system transition to greener forms of electricity.


To see how we are currently engaging with customer and stakeholders on this theme, visit the Focused Conversations page.


Explore the other themes


Back to top

Back to Regulatory Reset main page