Victorians are on track for some minor cost of living relief, with power bills potentially falling by up to $48 per year from July 1.
The Essential Services Commission (ESC) has published its draft default electricity prices for the next financial year, which directly impacts customers on standing offer energy plans. While the proposed prices aren’t locked in, the draft is a strong indicator of whether costs will rise or fall — and the news looks good for Victorians.
What Victorians could be paying for electricity from July 1
Every July, default or standing offer prices change across New South Wales, South East Queensland, South Australia and Victoria. In VIC, the standing offer is also called the Victorian Default Offer (VDO) and is regulated by the ESC.
Most Victorians aren’t on a standing offer plan, but can still be impacted by the VDO. Standing offer prices can have a knock-on effect, as retailers often tailor their more competitive plans based on default price changes.
There are five electricity distributors servicing VIC, so the price customers pay for energy varies depending on which distribution network covers their postcode.
Victorian default electricity prices | ||||
Distributor | Current annual price | Proposed 2026-27 price | Change | |
AusNet Services | $1,908 | $1,863 | -$45 | -2% |
CitiPower | $1,546 | $1,500 | -$46 | -3% |
Jemena | $1,638 | $1,592 | -$46 | -3% |
Powercor | $1,703 | $1,655 | -$48 | -3% |
United Energy | $1,579 | $1,536 | -$43 | -3% |
Source: ESC. Prepared by Canstar.com.au. Prices are estimates for an average household using 4,000 kWh/yr on a flat tariff on the default offer. | ||||
If the draft VDO is finalised, standing offer prices will drop by an average of $46 per year, with most distribution networks seeing a 3% decrease. The ESC has attributed the change to lowered environmental costs, as companies are paying less to support renewable energy programs.
Alongside default pricing changes, the ESC is also introducing new Victorian energy rules to help customers avoid the ‘loyalty tax’:
- Beginning July, retailers must ensure that customers who have been on the same plan for more than four years are paying a ‘reasonable’ electricity price; if not, they need to be moved to a cheaper plan.
- From October 1, customers with ongoing debt or who are experiencing hardship or payment difficulties must be moved on to their retailer’s cheapest available plan.
What you need to know about the VDO and standing offers
Australian households and small businesses have the choice between two types of electricity contracts: standing offers or market offers.
A standing offer includes regulated pricing and is designed to be a fallback option for customers who don’t shop around — if you haven’t changed your electricity plan in some time, your retailer has probably moved you onto its standing offer contract.
A market offer includes prices, offers and incentives set by your energy retailer, and is almost always a more competitive deal than a standing offer.
In VIC, the standing offer is called the VDO. When you’re searching through energy plans, you’ll notice that retailers are required to list how each plan’s estimated annual cost compares to the VDO.
The VDO changes each year on July 1, but the ESC gives retailers and customers plenty of notice by publishing its draft determination in March, before finalising the new prices in May. Once July rolls around, most retailers will begin updating market offers as well as standing offer plans, so it’s a good time for every customer to review their electricity price.
Can you get a better deal than the VDO?
Even customers who are currently on a market offer may be missing out on savings. Canstar’s data indicates that Victorians who switch from their distributor's standing offer plan to the lowest in our database could potentially save up to $409 over 12 months.
Potential savings switching from default to lowest cost electricity plan over the next 12 months | |||
Average | Lowest | Savings | |
Ausnet Services | $1,908 | $1,499 | $409 |
Citipower | $1,546 | $1,199 | $347 |
Jemena | $1,638 | $1,300 | $338 |
Powercor | $1,703 | $1,300 | $403 |
United Energy | $1,579 | $1,200 | $379 |
Source: Canstar.com.au - 12/03/2026. Based on single rate electricity plans on Canstar's database; excluding solar-only plans. One product shown per distribution network. Annual costs calculated based on the estimated lowest possible price a representative customer would be charged in a year, assuming all conditions of discount offered (if any) have been met. Representative customer based on the reference usage for VIC. | |||
Are you on the VDO or a standing offer plan?
According to the ESC, around 510,000 Victorian households are on a standing offer electricity plan. The VDO also sets a price cap for the 190,000 customers in VIC on embedded electricity networks who are unable to choose their own electricity retailer (including apartment, caravan park and retirement village residents).
So while most customers in the state are on a more competitive market offer, there’s still a significant number of residents who may be paying too much for power.
Not sure if you’re on a standing or market offer? You may be paying VDO prices if:
- You haven’t changed your electricity plan in at least 12 months, or have never chosen a specific electricity plan.
- You’ve moved into a new home and haven’t yet set up a new electricity plan.
Most people unknowingly end up on a standing offer when the electricity plan they’ve previously picked out expires: instead of cancelling your connection, energy retailers simply move you onto their standing offer plan by default.
Your most recent electricity bill lists which plan you’re on, so look for the ‘Plan Summary’ section and check the plan name. Another cheat code is to find the ‘Better Offer’ details on your bill’s first page, which will tell you if your energy retailer has another plan that could save you money.
If you are on the VDO, the first step to avoid price hikes is switching to a market offer plan. You can move to a lower-priced offer recommended by your current electricity provider, or compare a wider range of energy plans with Canstar.
Not in Victoria? Your electricity price may change too
While the VDO only applies to Victorians, the equivalent in NSW, SE QLD and SA is the Default Market Offer (DMO), which will also change on July 1.
The Australian Energy Regulator (AER) is expected to release the draft DMO sometime this month. It will include new protections for customers on embedded electricity networks (who are unable to choose their own electricity plan or provider), as well as a standing offer for the upcoming Solar Sharer Offer plan.
