The Essential Services Commission has released its draft decision on the 2025-26 Victorian Default Offer for public consultation.
The Victorian Default Offer is a fair, independently set electricity price that:
- gives Victorians access to a reasonable electricity deal, even if they are unable or unwilling to engage in the retail market.
- acts as a reference price so customers can more easily compare different deals in the market.
- is the maximum amount electricity retailers can charge customers in embedded networks, such as apartment buildings and office blocks.
Approximately 13 per cent of households (337,000) and 20 per cent of small business customers (56,000) are currently on the Victorian Default Offer. There are approximately 189,000 customers in embedded networks in which the Victorian Default Offer applies as a maximum charge.
The commission's proposed rates vary between the state's five electricity distribution zones, which accounts for the different costs of providing electricity across the state.
Residential
For residential customers on the Victorian Default Offer, annual prices would drop by $19 in some distribution zones but increase by up to $68 in others, compared to 2024–25. The average across the five zones is a $12 increase on last year (less than 1 per cent).
The main factors influencing the proposed price change for residential customers are higher electricity network costs, which are partially offset by lower wholesale and environmental costs.
Small business
For small businesses on a Victorian Default Offer, annual prices would increase across the five distribution zones by between $77 and $128, compared to 2024–25. The average across the five zones is a $103 increase on last year (3 per cent).
The main factors influencing the proposed price change for small business customers are higher wholesale and network costs but also lower environmental costs.
Consultation on the draft decision, which includes a public forum, runs until 11 April 2025, with the commission's final decision due by 24 May 2025.
Quotes attributable to Essential Services Commission Chairperson and Commissioner Gerard Brody
"These prices are set independently of energy retailers, which ensures all Victorian households and small businesses have access to a fair and reasonable price. It also gives people confidence that they'll continue to receive a fair deal without having to test the market each year."
"The default offer isn't the cheapest on the market, as retailers look to attract new customers by offering a low price. But it is a fair price and one that won't increase by more than the Essential Services Commission allows, which means it will stay fair."
"If you're someone who is willing and able to review your electricity plan each year, you'll be able to find cheaper deals. But if you can't or don't want to be swapping deals each year, the default offer is a good, fair option."
"We know that even small increases can affect household and small business budgets. If you're having trouble paying your energy bill, speak with your retailer – they must provide help such as payment plans and assistance applying for concessions and utility relief grants."
Background
Tables outlining the proposed default offer for each of the five electricity distribution zones are available on pages 6 (residential) and 8 (small business) of the Draft Decision.
The figures used in this media release assume annual usage of 4,000 kilowatt hours for residential customers and 10,000 kilowatt hours for small business customers.
