What the Victorian Default Offer is
The Victorian Default Offer, or VDO, is the price the Essential Services Commission sets for households and small businesses that have not signed up to a market offer. It replaced the old system of retailers setting their own standing offer prices, which had left many loyal customers paying far more than new ones.
The VDO started on 1 July 2019, the same day the federal Default Market Offer began elsewhere. The two do a similar job, but they work differently. The DMO is a cap on an annual bill, while the VDO sets the actual tariff: a daily supply charge and a usage rate for each network.
Who pays the VDO
- Households and small businesses who have never chosen a market offer.
- Customers whose market contract ended without moving to a new one.
- Most households in embedded networks, such as apartment buildings, where the VDO is the maximum price an exempt seller can charge.
If your bill says you are on a standing offer or the Victorian Default Offer, you are paying the regulated price. Most Victorians are on market offers instead, many of them cheaper.
VDO rates by distributor for 2026-27
| Distributor | Usage | Supply | At 4,000 kWh |
|---|---|---|---|
| AusNet ServicesEastern Melbourne, Gippsland and north-east Victoria | 31.98c | $1.28/day | $1,747 |
| CitiPowerMelbourne CBD and inner suburbs | 25.96c | $1.21/day | $1,481 |
| JemenaNorth-west Melbourne | 27.47c | $1.27/day | $1,563 |
| PowercorWestern Melbourne and western Victoria | 28.22c | $1.38/day | $1,633 |
| United EnergySouth-east Melbourne and Mornington Peninsula | 27.35c | $1.19/day | $1,529 |
The gap between the cheapest and dearest network is about $267 a year at 4,000 kWh. AusNet Services customers in the outer east and the north-east pay the most, and CitiPower customers in the inner city pay the least. The VDO also sets controlled load and time-of-use prices. Our Victorian electricity rates page lists those in full.
Why prices fell for 2026-27
The ESC put the 5% average cut down to lower wholesale, network and environmental costs. It published its final decision on 20 May 2026 and the new prices applied from 1 July 2026.
VDO versus market offers
Every Victorian retailer must show how its offers compare to the VDO for your network, and every bill must show your retailer's best offer for you based on your actual usage. Those two rules make Victoria one of the easier places in the country to tell whether you are paying too much.
A market offer can be cheaper than the VDO because of a lower usage rate, a lower supply charge, a time-of-use structure that suits you, or a conditional discount. In Victoria, pay-on-time discounts must reflect a reasonable estimate of the retailer's costs, so missing a payment cannot cost you an unreasonable penalty.
The Midday Power Saver and the VDO
From 1 October 2026, retailers with 1,000 or more Victorian customers must offer a Midday Power Saver plan with free power from 11am to 2pm every day, up to 24 kWh. It is a market offer, not part of the VDO, and you have to ask your retailer for it. Whether it beats the VDO depends on how much of your usage you can move into those three hours. Our Midday Power Saver guide walks through the trade-offs.
How to find a better deal than the VDO
Find your distributor
It is printed on your bill. Comparing against the wrong network's VDO gives you the wrong answer.
Read the best offer message
Your bill must show your retailer's best offer for you. If it is well below what you pay, ask to be moved onto it.
Use Victorian Energy Compare
Upload your bill or smart meter data to the state government's free comparison site. It prices every plan on your real usage.
Check the conditions
Look at how the price compares to the VDO without any conditional discount, and whether rates change after a benefit period.
Questions about the Victorian Default Offer
It is the regulated electricity price set each year by the Essential Services Commission for Victorian households and small businesses that are not on a market offer. There is one price for each of the five distribution networks. Retailers must also compare their market offers to it, which makes it the main price benchmark in Victoria.
The flat rate ranges from 25.96c/kWh in the CitiPower area to 31.98c with AusNet Services, with daily supply charges between $1.19 and $1.38, including GST. The ESC put the average VDO bill at $1,591 a year for a home using 4,000 kWh, down 5% on 2025-26.
They do a similar job but are set differently. The VDO is set by the Essential Services Commission for Victoria and specifies the actual tariff. The DMO is set by the Australian Energy Regulator for NSW, South East Queensland and South Australia, and caps the total annual bill rather than each charge.
You are if your bill says you are on a standing offer or the VDO. That usually happens if you never chose a plan or your market contract ended. Most households in Victorian embedded networks also pay prices capped at the VDO. If you are on it, comparing plans will often save you money.
On a market offer, yes. A retailer can sell a plan priced above the VDO, but it must show you how the plan compares, so you can see it is dearer. On a standing offer, retailers in Victoria must charge the VDO itself.
The Essential Services Commission said lower wholesale, network and environmental costs drove the cut. The average VDO bill fell by about $84 a year, or 5%, for a household using 4,000 kWh. The new prices applied from 1 July 2026.
Start with the best offer message on your bill, then use Victorian Energy Compare, the free state government site, with your bill or smart meter data. It prices every plan on your real usage. Check how each plan compares to the VDO before any conditional discount, and whether prices change after a benefit period.
No. The Midday Power Saver is a separate market offer that retailers with 1,000 or more Victorian customers must make available from 1 October 2026. It gives free power from 11am to 2pm, up to 24 kWh a day. You have to ask your retailer for it.
Sources
Every rate on this page comes from the regulator or the regulated retailer. Last checked October 2026. Prices include GST unless we say otherwise.