The cost of electricity will fall in all five of Victoria’s electricity distribution zones, the state’s pricing regulator has confirmed, cutting household energy bills by an average of $84 in the coming financial year and by an average of $241 a year for small businesses.
The Essential Services Commission (ESC) final determination on the 2026-27 Default Victorian Offer (VDO) sets the catch-all price of power even lower than was initially projected in the draft decision in March, giving the state Labor government a welcome win with cost-of-living conscious voters ahead of the November state election.
The VDO caps the price electricity retailers in the state can charge a small proportion of household and small businesses on standing offers. Around 512,000 households and 62,000 small businesses currently on the VDO will benefit directly from an immediate price cut when the new rates take effect.
But like the Default Market Offer (DMO), which is set separately by the Australian Energy Regulator for the rest of the National Electricity Market (NEM) states, it also acts as a sort of benchmark for all retail offers.
In its final call on the VDO for 2026-27, the ESC proposes that prices for domestic customers will decrease across the board by between as much as $160 for AusNet customers down to $50 for United Energy customers, averaging out at a roughly 5 per cent drop, year-on-year.
