Victorian Default Electricity Prices: Have Your Say

Victoria’s Essential Services Commission (ESC) is reviewing prices for the 2025-26 Victorian Default Offer for electricity and has released a request for comment paper. And it shouldn’t be long before a draft decision for feed-in tariffs is also published.

The Victorian Default Offer (VDO) is what households and small business customers in the state pay for electricity if they haven’t chosen a market offer. Market offers are often less expensive than the VDO, but the default offer is meant to act as a safety net of sorts; preventing folks from being gouged (too much).

While the VDO only applied to approximately 13 per cent of households and 20 per cent of small businesses as at June this year, plus as a maximum price benchmark for embedded network customers¹, the VDO tends to set the scene for market offers. Victorian retailers must also compare their market offers to the VDO prices when advertising.

The ESC’s final decision on the 2024–25 Victorian Default Offer represented a 6 per cent reduction in average domestic annual bills compared to 2023-24. Whether there will be another drop for 2025-26 remains to be seen.

“Each year we review the different costs that make up electricity bills, including wholesale electricity costs, the cost of getting energy to customers, and retailer operating margins,” said ESC Chairperson Gerard Brody. “We want to hear from stakeholders about the approach we use to set our cost benchmarks and whether they can be improved.”

To contribute feedback on the 2025-26 Victorian Default Offer, interested parties are encouraged to do so via the Engage Victoria website before 5pm on 24 December 2024. The request for comment paper can be found here. The ESC’s draft decision will be released for consultation in March 2025, followed by final decision in May 2025.

Solar Feed-In Tariff Review Decision Soon?

On a related note, it was around this time last year (late November actually), when the ESC commenced consultation on its draft decision for minimum solar feed-in tariffs in Victoria for 2024/25. Looking further back, draft decisions for the following financial year were usually published in mid-November to mid-December; so the 2025/26 draft decision shouldn’t be far off.

For the current financial year, the single rate minimum is 3.3 cents per kilowatt-hour and time varying rates range from 2.8c – 8.4c/kWh. While minimum rates, retailers can (and sometimes do) offer more. It’s another good reason to compare electricity plans regularly; although the real value from solar panels for some years has been in maximising self-consumption rather than feed-in tariffs. Bear in mind also that the highest FiT does not necessarily represent the best electricity plan overall for a solar household – consumption, daily and other charges also need to be weighed up.

Victorian Energy Market Report Published

In other news from the ESC, the Commission released its 2023-24 Victorian Energy Market Report on Friday, which indicates a higher number of customers missed a bill payment, were in debt, or were at risk of disconnection during the report period. However, fewer customers were disconnected. But Mr. Brody expressed concerns there were many customers in arrears not receiving payment assistance.

“It is important that retailers communicate effectively with customers experiencing difficulty paying their energy bills rather than placing too much reliance on disconnection warning notices.”

The report also notes during the report period the Commission issued penalties totalling more than $2.6 million against Victorian energy licensees, accepted four enforceable undertakings and engaged in four Supreme Court proceedings – the period marked the first time the ESC has instituted proceedings in the Supreme Court.

The Victorian Energy Market  Report – 2023–24 can be accessed here.