Victorian Default Offer explained

Victoria did not adopt the federal Default Market Offer. It already had a state regulator and a state comparison site, and it kept both. The Victorian Default Offer (VDO) is the price the Essential Services Commission sets each year for standing-offer electricity. It is the number Victorian retailers must treat as the reference price in advertising. It is not a retailer, and it is not automatically the plan you should be on.

If you have just moved from New South Wales or Queensland, the vocabulary will feel familiar and the institutions will not. Swap Energy Made Easy for Victorian Energy Compare. Swap the AER for the ESC. Swap Ausgrid or Energex for CitiPower, Powercor, United Energy, Jemena or AusNet. The rest of the method — collect usage, compare estimated annual cost, then switch — stays the same.

How the ESC sets the VDO

The Essential Services Commission is Victoria's economic regulator for electricity, gas and a list of other essential services. Each year it estimates an efficient retail cost stack: wholesale energy, network charges paid to the distributor, environmental certificate costs, retail operating costs and a regulated margin. The result is a VDO price for each distribution network, published for residential and small-business customers, and for the main tariff types.

The VDO takes effect on 1 July, in step with the rest of the east-coast price year. Retailers must update standing-offer prices so they do not exceed the VDO. They must also redo the comparison wording on market-offer fact sheets. That is why Victorian bills and emails cluster in late June and early July.

The ESC is not picking winners. It is setting a maximum for the default product and a common stick for advertising. Market offers can sit below the VDO. They can also sit close to it once a sign-up credit expires. A plan that is "below the VDO" is a starting claim, not a personalised quote.

VDO versus DMO

The Default Market Offer and the VDO are cousins, not twins.

• Who sets it. DMO: Australian Energy Regulator. VDO: Essential Services Commission.
• Where it applies. DMO: specified networks in New South Wales, south-east Queensland and South Australia. VDO: Victoria only.
• Comparison site. DMO jurisdictions use Energy Made Easy. Victoria uses Victorian Energy Compare.
• Representative usage. The AER's 2026-27 DMO uses different annual kilowatt hours in each network (3,900 to 4,900 kWh). Victorian commentary on the 2026-27 VDO commonly uses 4,000 kWh.
• Solar Sharer. The Solar Sharer Offer is a DMO-area product. Do not assume a free midday window exists on a Victorian standing offer just because you read about it on a New South Wales fact sheet. Check the Solar Sharer Offer for where it actually applies.

Both instruments cap standing offers and discipline advertising. Neither tells you the cheapest retailer. Neither applies in Western Australia. If you want the national map, read how electricity markets differ across Australian states.

If a salesperson quotes a "reference price" in Victoria, they should mean the VDO, not the DMO.

Victorian Energy Compare

Victorian Energy Compare is the site to use. It is run for the Victorian government. Retailers must lodge current offers. You do not pay a broker fee, and the ranking is not funded by a commission.

Enter your address or your NMI so the tool knows which distributor serves the premises. Add usage from a bill. If you have solar, add export kilowatt hours. If you hold a concession card, say so: Victorian concessions interact with the bill in ways a raw usage rate will not show. Energy concessions and rebates by state outlines the cards; the comparison site will apply the ones it can.

Sort by estimated annual cost. Open the fact sheet on anything that looks cheap and check the tariff type. A time-of-use or demand estimate is not interchangeable with a single-rate VDO headline. How to compare electricity plans is the general method; this paragraph is the Victorian socket it plugs into.

Do not use a national aggregator as your only source. Some of them scrape Victorian offers and then bury a phone number. If they cannot show you the same plan on Victorian Energy Compare, treat the quote as marketing.

Network areas and the 2026-27 range

Victoria has five privately owned electricity distributors. The VDO is different in each because the network component of the bill is different. Poles, wires, urban density and bushfire-related expenditure do not cost the same in a Melbourne terrace and a Gippsland farm.

The five areas, in plain language, are:

• CitiPower — inner Melbourne
• Powercor — western Melbourne and western Victoria
• United Energy — south-east Melbourne and the Mornington Peninsula
• Jemena — north-west Melbourne
• AusNet — outer northern and eastern Melbourne and much of eastern Victoria

For 2026-27, at 4,000 kWh, the residential VDO sits at about $1,481 in CitiPower's area and about $1,748 in AusNet's area. The other three networks fall between those two figures. The gap is mostly network cost, not a judgement that one retailer is greedier in the bush.

Your bill will not be $1,481 or $1,748 unless you happen to use 4,000 kWh on a standing offer with the tariff shape the ESC used. Use more, and the bill scales with the usage rate. Use less, and the daily supply charge becomes a bigger share. A holiday house that sits empty still pays supply every day it is connected.

Check the distributor name on your bill or look up the NMI. Comparing a CitiPower VDO with an AusNet neighbour's bill is how family group chats start false rumours about retailers.

Solar customers

Rooftop solar does not exempt you from the VDO. Standing-offer import rates are still capped. Exports are a separate price: the feed-in tariff. Victoria has had a minimum feed-in in the past and has also moved that setting. Whatever the current minimum is, many market offers pay a different voluntary rate. The VDO page on a retailer's website will not usually be the best place to hunt a feed-in.

When you compare as a solar household:

• Enter both grid imports and solar exports on Victorian Energy Compare.
• Watch the evening and morning usage rate. That is when most solar homes still buy from the grid.
• Treat a high feed-in with a high usage rate as a package, not as a gift. If you self-consume most generation, the usage rate matters more.
• If you are considering a battery, the plan choice and the tariff type should be decided together. Whether a home battery is worth it depends on the evening rate you avoid, not on the VDO headline.

Solar feed-in tariffs explained and electricity plans for solar households cover the plan mechanics. The VDO is only the floor under the default import price.

Switching off a standing offer

Plenty of Victorian households are still on a standing offer because they moved in, never chose a plan, or let a market offer lapse. The VDO makes that default less punishing than an uncapped standing offer would be. It does not make it competitive.

Switching retailer in Victoria is the same physical process as elsewhere on the National Electricity Market. The distributor keeps the meter and the poles. The retailer changes. There should be no supply interruption on a normal transfer. How to switch electricity retailers walks through the steps.

Practical checks before you leave a standing offer:

• Confirm you are not on a hardship arrangement that would be disrupted. Energy hardship programs come first if you are behind.
• Note any life-support registration and re-notify the new retailer and the distributor.
• If the new plan was sold at the door or on an unsolicited call, you generally have 10 business days to cool off.
• Diary the benefit-period end date. Victorian market offers can look well below the VDO in month one and ordinary by month thirteen.

Re-run Victorian Energy Compare after each 1 July VDO decision, and again if you add an air-conditioner, a battery or an electric vehicle. The VDO will move. Your usage will move. The standing offer will still be the safety net, not the destination.