11 March 2019
Statement on the Victorian Default Offer
Origin Energy Limited (Origin) notes that on 8 March 2019, the Victorian Essential Services Commission released its draft advice for the Victorian Default Offer (VDO) for customers on standing offers.
The impact of the VDO on Origin will be dependent on the final decision of the Victorian Government, ahead of an expected 1 July 2019 implementation.
Based on the draft advice, Origin estimates an annual reduction in revenue for residential and small business standing customers of less than $20 million.
Origin CEO Frank Calabria said, “Origin has competitive offers in the Victorian market. Since 2017 we have provided substantial discounts of 26 per cent to concession card holders and 17 per cent to households on standing offers.
“Origin is proud of the actions we have taken to deliver price relief to our Victorian customers, and in particular, support our concession holders and those vulnerable members of our community.
“It is important to note that existing regulation specific to Victoria, including the annual easement land tax paid by the transmission networks and the complete ban on onshore gas development, currently contribute to upward pressure on energy prices in that state.
“Origin’s concern is that the introduction of the VDO will add to these cost pressures, and we could see both investment and competition decline in response to this additional intervention in the Victorian market,” Mr Calabria said.
Price review outcome and update on FY2021 guidance
Origin Energy Limited (Origin) has provided the following update on earnings guidance for the year ended 30 June 2021 (FY2021), following an adverse outcome on a domestic gas contract price review, combined with a further deterioration in Energy Markets’ operating conditions.