Commission Executive Director of Energy, Sarah Sheppard, said the cap, which is set annually by the commission, protects Victorians from being stung by a high penalty price if they miss a payment.
“Limiting the amount paid for missing a deadline helps reduce bill shock for households and small business,” she said.
“Before the cap, consumers who were late paying a bill were paying high penalties, sometimes amounting to hundreds of dollars.”
Ms Sheppard said customers on payment plans are also protected from being penalised.
“Customers receiving tailored assistance who miss a bill payment must still get their pay-on-time discount,” she said.
Each year the commission sets the maximum Victorian energy consumers can be charged for being late with a bill payment.
The new cap, applying to contracts commencing on or after 1 July 2022, rose from 3.1 per cent to 5.71 per cent due to a significant increase in the debt risk premium being carried by energy retailers. The increase in the cost of debt is driven by local factors and global factors, including rising inflation, increasing interest rates and global supply-side restrictions due to the war in Ukraine.
Customers on existing offers with pay-on-time discounts will not be affected by the change to the cap.