Finally, some good news for Victorian households, with the energy regulator today confirming the state’s default electricity prices will be 5% lower from 1 July.
The final Victorian Default Offer (VDO) for the 2026-27 financial year, published by the Essential Services Commission (ESC), shows flat rate plans will drop by between 3–8% across the state’s five electricity networks, saving a typical household between $50 and $160 a year.
Across Victoria, the average saving will be 5% or $84.
The VDO serves as a safeguard for households that cannot or do not shop around for electricity, with 17% currently on these plans. It also acts as a benchmark for the wider Victorian retail market.
The final prices will take effect on 1 July 2026. Note: The final default prices for NSW, South Australia, and south-east Queensland will be published tomorrow by the Australian Energy Regulator.
Victorian default | ||||
|---|---|---|---|---|
Distributor | FY25-26 | Final | Change | |
AusNet | $1,908 | $1,748 | -$160 | -8% |
CitiPower | $1,546 | $1,481 | -$65 | -4% |
Jemena | $1,638 | $1,563 | -$75 | -5% |
Powercor | $1,703 | $1,633 | -$70 | -4% |
United | $1,579 | $1,529 | -$50 | -3% |
Average | $1,675 | $1,591 | -$84 | -5% |
Source: ESC. Prepared by Canstar. Prices are estimates for an average household using 4,000 kWh/yr on a flat tariff on the default offer.
What is driving the drop in prices?
The drop in household prices was driven by three primary factors:
- Lower wholesale costs, despite global fuel turmoil (-2%).
- Lower network costs, that is, the cost of delivering electricity to people’s homes (-2%).
- Lower environmental costs, which are the costs companies have to pay to support state and federal renewable energy programs. While only a small component of the price, it has almost halved from the 2024-25 default offer (-46%).
Interestingly, the final pricing for households is lower than the draft prices slated by the regulator in March across all five networks. The commission has said the war in the Middle East has had a “mixed but generally mild” impact on wholesale costs, which has seen it factor in slightly higher prices initially in FY2026-27 but drops later on.
New rules to lock out loyalty tax
The 1st of July will see a new rule kick in for energy retailers, requiring them to ensure any customers who have been on the same plan for four or more years are paying a "reasonable price".
This change could see up to 53,000 electricity customers moved to cheaper plans, and potential total savings of $12.2 million, according to estimates from the ESC. Per customer, this could equate to an annual savings of $230.
Some further rule changes, coming into effect in October 2026, will also require retailers to:
- Automatically move customers having trouble paying onto the provider’s cheapest available plan.
- Offer payment methods other than direct debit for each plan.
- Increase the minimum debt owing before disconnection from $300 to $1,000.
Households can potentially get a bigger discount by shopping around
While the regulator sets the default offer, most households should be able to secure a much larger discount by switching plans and/or providers.
Data from the regulator shows 61% of Victorian electricity customers are not even on their own provider’s lowest cost plan.
Canstar analysis shows if a typical household in Victoria switched from the current default offer to the lowest-priced plan on Canstar's database, they could potentially save up to $360 over the next year.
Potential annual savings | |||
|---|---|---|---|
Current | Lowest | Savings | |
Ausnet | $1,908 | $1,425 | $483 |
CitiPower | $1,546 | $1,155 | $391 |
Jemena | $1,638 | $1,222 | $416 |
Powercor | $1,703 | $1,273 | $430 |
United | $1,579 | $1,176 | $403 |
Source: Canstar - 25/05/2026. 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.
A relief for households across Victoria
Canstar’s Data Insights Director, Sally Tindall, says, “What a relief this news will be for households across Victoria.”
“It’s been an incredibly tough start to the year with many households struggling with the end of the electricity rebates.
“While drops of between $50 and $160 a year for a typical household are welcome, at best it's plugging only just over half the hole left from axing of the federal rebate. For some, it still won’t be enough to prevent them from falling into hardship this winter.
“The Victorian Default Offer is an incredibly important safety net for those households that can’t or don’t switch, which is currently 17 per cent of the state’s population. However, if you’re on one of these electricity plans, know you’re paying too much.
“Canstar’s analysis shows that a typical Melbourne household on a default plan could potentially save hundreds of dollars more simply by switching to the lowest-priced plan in the market.
“When these price cuts take effect on 1 July, we expect the providers to follow in the regulator’s stead and pass these price drops on to their other retail plans. However, customers will need to keep an eye on exactly what their provider offers them in terms of price relief and when.
“The new rule coming in from July, which forces energy retailers to move customers on legacy plans to more reasonably-priced ones, is a huge step forward and could help as many as 53,000 Victorian households.
“Penalising loyalty is a concept that has become entrenched in the way so many bills operate, and these new reforms will make the system fairer for everyone.”
