The ESC noted its March draft forecast expected a smaller $46 annual bill drop; the Australian Energy Council warned that reductions may not reflect a structurally lower-cost environment due to rising network costs and wholesale price volatility.

Victoria’s default electricity offer (VDO) prices will be 5% lower than last year, effective July 1, 2026, as announced by the Essential Services Commission, with an average 5% cut for households and 6% for small businesses in the coming financial year.

Savings from the price cut vary by retailer and region, with AusNet eastern Victoria customers potentially saving about $160, and Citipower/Powercor western Victoria customers saving around $65 to $70.

The default offer covers 182,000 customers in apartments and caravan parks who cannot choose a supplier, serving as a basic plan for those who don’t engage with retailers.

The Australian Energy Regulator’s final decision on the default offer is anticipated soon, with implications for NSW, SA, and southeast Queensland.

Around 512,000 households and 62,000 small businesses on the default pricing will benefit, with average savings of about $84 for households and $241 for small businesses.

Energy Minister Lily D’Ambrosio attributes the price drop to renewed renewable investments, framing the reduction as making life cheaper for Victorians and countering arguments that renewables would raise prices.

The VDO acts as a safety net, encouraging consumers to shop around for potentially better market offers, while providing a simple, fair option set independently of retailers.

Unlike other eastern states projecting price increases of 2.5% to 8.9%, Victoria is delivering a price decrease under the VDO.

The price decrease is driven by lower environmental and wholesale costs, with Victoria’s power mix historically relying on brown coal (about 82%), followed by solar and wind.

ESC commissioner and chair Gerard Brody emphasized the reduction is independent of retailers to ensure Victorians get a fair deal, reflecting lower environmental, network, and wholesale costs next year.

For 2026/27, the VDO is 14% lower than the 2019 standing price, the year the VDO was introduced.