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• What is the Victorian Default Offer (VDO)?
• How much is the Victorian Default Offer (VDO)?
• How does the Essential Services Commission (ESC) decide the Victorian Default Offer (VDO)?
• Is the Victorian Default Offer (VDO) better than my current electricity plan?
• How could the Victorian Default Offer (VDO) help me save money?
• Can I get the Victorian Default Offer (VDO)?
• Does the Victorian Default Offer (VDO) apply to gas?
• Is your cheaper electricity plan out there?

Long story short

The VDO is a government-regulated price for electricity in Victoria (Vic)

It’s an option for households and small business customers that can’t or don’t want to shop around for electricity plans.

VDO prices vary by location and tariff type

In 2026–27, daily supply charges for homes ranged from $1.1912 to $1.3805, with usage rates (not on controlled loads) between $0.2596 and $0.3198.

The VDO isn’t guaranteed to be the cheapest plan

Market offers can be cheaper, especially with discounts or bundles, but you should still compare the VDO against all plan options available.

What is the Victorian Default Offer (VDO)?

The VDO is government-set electricity pricing for standing offers in Vic that offers fair electricity prices to residential and small business customers. The Essential Services Commission sets the VDO reference prices, which act as a default plan for customers who can’t or don’t want a market energy plan. The VDO also acts as the maximum electricity price that customers can be charged, including embedded networks, for a standing offer plan. It might not be the lowest plan available, so if you don’t want to go with the VDO you don’t have to; it’s just there if you want to use it.

The VDO was introduced to Melbourne’s electricity market in July 2019 after an independent review. What this review found was that many customers were paying too much for their energy. So, the Energy Fairness Plan came along with several reforms, including the VDO, to help make the electricity market simpler and more affordable.

How much is the Victorian Default Offer (VDO)?

The average annual bill as set by the VDO for residential customers who use 4,000 kilowatt hours (kWh) is $1,591 in the 2026–27 financial year. But the exact cost will depend on your distributor, energy provider and the type of tariff you’re on. This is to reflect the different costs in providing electricity to different locations, like Melbourne’s outer suburbs versus Echuca. If you’re not sure which distribution zone you’re in, it may be listed on your electricity bill.

The VDO also caters to time-of-use tariffs and controlled load tariffs. Time-of-use tariffs are great if you want to take advantage of off-peak and solar soak periods to potentially help lower your overall energy costs. On the VDO, the peak period for households is 4 pm to 9 pm each day, off-peak is from 9 pm to 11 am and the solar soak period runs from 11 am to 4 pm. You’ll need to have a smart meter or interval meter to make use of any time-of-use savings though.

Controlled load tariffs are also available, which are designed for power-hungry appliances, like pool filters. Within these tariffs, electricity is only supplied to them for part of the day. You’ll need a separate power meter for these devices.

Note: These figures reflect indicative Victorian Default Offer prices in 2026–27 for different tariff types based on data from the Essential Services Commission and rounded where appropriate. Actual costs may vary depending on location, energy provider and tariff type. Data retrieved June 2026.

Helpful tip

From October 2026, Victorian households may be able to tap into 3 hours of free electricity each day between 11 am and 2 pm. The idea is to get more homes using power when solar power is high, and demand is low. If you can shift just 5% of your power usage into the new Midday Power Saver window, the Victorian Government reports homes could save around $149 on their energy bills annually. Just keep in mind you’ll need a smart meter to take part.

Julia Paszka

General Manager – Utilities & Credit Cards

How does the Essential Services Commission (ESC) decide the Victorian Default Offer (VDO)?

The ESC determines the VDO each financial year by taking a range of costs involved in generating and supplying electricity into account. For the 2026–27 financial year, the ESC calculated the average bill using the following mix: 31% came from wholesale electricity costs, 38% from network costs and losses, 12% from retail costs, 4% from environmental costs, 5% from retail operating margins, 9% from GST and the final 1% came from other costs.

• Wholesale costs: based on retailer’s cost of purchasing electricity in the market.
• Network costs and losses: Based on a distributor’s tariff and metering charges and losses from electricity lost during transmission.
• Retail operating costs: the cost of a retailer operating for residential and business customers, including customer acquisition and retention costs.
• Environmental costs: associated with environmental compliance and laws for the energy market.
• Retail margin costs: operating margins for retailers based on market and standing offers.
• Other costs: Australian Energy Market Operator fees, ancillary, licence and market intervention fees.

By making the VDO fair for everyone, the ESC balances the efficient costs incurred from generating, distributing and selling electricity to Victorians while avoiding unfair charges for an essential service.

Is the Victorian Default Offer (VDO) better than my current electricity plan?

Not always. The VDO aims to be a fair price for electricity, but it may not always be the lowest option available. This depends on what discounts and offers electricity retailers in your area offer. To find out if the VDO is cheaper for you, you’ll need to know where you stand with your current electricity plan and compare what’s available to you to find one that works for your household.

The VDO applies to standing offer plans, so if you haven’t actively picked and signed on with an electricity plan and the lights are still on, then you may be on a standing offer. Then again, you might’ve specifically asked your electricity retailer for a standing offer. Either way, it’s worth double-checking your details on your electricity bill the confirm the plan you’re on.

If you are on a market retail offer (the ones you often see advertised by electricity providers), you may be paying more or less than the VDO. You’ll need to look at your contract or latest electricity bill and compare the prices to see how the VDO measures up. Remember to keep any extra services that might be bundled up in your market plan in mind when comparing.

While the VDO benchmark pricing is only reviewed once a year, market offers can be more flexible. Retailers may choose to reduce their market rates throughout the year but are generally only increase prices once a year (usually around the same time as the VDO is released). Because market offers can move a bit more independently, but still within reason to the VDO, it’s worth weighing up your current electricity plan against the latest VDO, rather than assuming one will always be the cheapest.

How could the Victorian Default Offer (VDO) help me save money?

The VDO could help you save money if you are in a more remote location or have higher electricity bill prices. With the VDO helping ensure fairer pricing, homes with higher distribution or network charges in rural areas can find a cheaper option with the VDO than a market plan, but this will depend on individual homes. For most metro Victorian homes, a VDO standing offer will most likely not be the cheapest option.

Even if it’s not the cheapest, the VDO is still worth knowing about. Not only can it give you a good idea of current reasonable benchmark prices, it’s a legal requirement for electricity retailers to use the VDO as a comparison reference price for any of their advertised market offers. This gives you a reliable and simple way to compare or benchmark lots of different electricity plans from a wide variety of electricity retailers.

Can I get the Victorian Default Offer (VDO)?

Yes, you can. If you live in Vic, you’ll be able to choose a VDO standing offer plan. If you are in an embedded network, like an apartment block, retirement village or caravan park, you can also access the VDO.

While you can’t choose the VDO if you live outside Vic, there are other forms of government set pricing in different states. Households in New South Wales, South-East Queensland and South Australia can choose the Default Market Offer, which is a comparison price set by the Australian Energy Regulator. It acts in the same way as the VDO by limiting the max price electricity retailers can charge for standard offer plans and as a benchmarking tool for market offers. Similarly, while it aims to be fair and protect consumers from paying too much for their electricity if they can’t or don’t want to shop around, it isn’t necessarily the cheapest price out there.

If you live elsewhere in Australia, like Tasmania or Western Australia, default offers aren’t really a thing. This is because some states and territories have regulated electricity prices. Depending on how this is handled, you may be able to still shop around electricity retailers for additional value, or you could be restricted to certain retailers based on availability in your location or how much electricity you use.

Whether you can access the VDO or not, it can be worthwhile exploring what’s on offer in your area. You may be able to find a plan that better suits your needs or gives improved value. But you won’t know unless you look.

Does the Victorian Default Offer (VDO) apply to gas?

No, the VDO only applies to electricity prices not gas. Currently, there’s no similar default offer for gas. However, Vic energy retailers are legally required to let you know via your power bill if you could potentially be saving money on a cheaper plan offered by them. This information needs to appear on your gas bill every 4 months and every 3 months for your electricity bill. So, keep an eye out for your best offer notice.

Comparing the gas plans available to your home should be your first option when looking for a plan that better matches your needs or budget. Since there’s no VDO equivalent, it’s important that you look carefully at all the plan details, or you can get iSelect to help you.

Is your cheaper electricity plan out there?

Along with the Victorian Default Offer, using comparison tools like those provided by iSelect may help you find a cheaper electricity plan. With iSelect, we can help you explore a variety of electricity plans and brands, and you can use your newfound VDO knowledge to help check you’re getting great value for money. You can start comparing electricity plans online or give us a call on 1800 664 532 today.