Victorian Default Offer price review 2025–26

Overview

We are responsible for setting and annually reviewing the Victorian Default Offer prices. The default offer is designed to be a simple, trusted and reasonably priced electricity option that safeguards customers who are unwilling or unable to engage in the electricity market. 

We have set the Victorian Default Offer prices to apply from 1 July 2025 to 30 June 2026. 

How cost components and annual bills will change under our final decision

Change in the average Victorian Default Offer annual bill by cost component, for domestic customers with annual usage of 4,000 kWh, $ nominal 

Change in the average Victorian Default Offer annual bill by cost component, for small business customers with annual usage of 10,000 kWh, $ nominal 

Victorian default offer prices to apply from 1 July 2025 to 30 June 2026

Fixed flat tariffs for general usage and general usage+controlled load usage – domestic customers (including GST)

¹ Only if a controlled load or dedicated circuit is available with the customer.

Fixed flat tariffs for general usage – small business customers with consumption less than 40 MWh per year (including GST)

Two period time of use tariffs – domestic customers (including GST)

¹ Only if a controlled load or dedicated circuit is available with the customer.

Two period time of use tariffs – small business customers with consumption less than 40 MWh per year (including GST) 

Our price determination covers all types of standing offers including those based on time-of-use, demand and flexible tariff structures.

How we calculate the Victorian Default Offer

We are required to base the Victorian Default Offer on the efficient costs of the sale of electricity by a retailer. In doing so, we take into account:

• Network costs - based on distributors' network tariffs and metering charges approved by the Australian Energy Regulator. 
• Wholesale electricity costs - based on the forecast cost of purchasing electricity in the futures market, including a wholesale cost of exports and factoring in a volatility allowance. 
• Environmental costs - based on retailers' costs of complying with environmental obligations imposed under Commonwealth and Victorian law or regulation.
• Retail operating costs - based on the customer-weighted average of the retailers' actual retail operating costs for domestic and small business customers. These costs include modest customer acquisition and retention costs - based on the 2013-14 average acquisition cost benchmark updated for inflation. 
• Other costs - Australian Energy Market Operator fees, ancillary service fees, licence fees and market intervention costs.
• Network loss factor - based on information from the Australian Energy Market Operator, and applied to wholesale electricity costs, environmental costs and variable other costs. 
• Retail operating margin - based on a retail operating margin benchmark and having regard to market offer prices relative to default offer prices, the expected returns approach and retailers' actual margins. 

Contact us

If you have any questions about the review you can contact us using the following methods:

• Email: VDO@esc.vic.gov.au
• Mail: Essential Services Commission, Level 8, 570 Bourke Street, Melbourne Victoria 3000
• Phone: 03 9032 1300

Next steps

Victorian Default Offer 2025–26 prices will come into effect from 1 July 2025