Electricity prices in Victoria set to drop just in time for winter — here’s how
Victorian electricity prices could drop by an average of 3% from 1 July 2026 if the energy regulator's latest proposal goes ahead.
This translates to annual residential power bills being cut by an average of $43-$48, depending on your energy distributor.
For small businesses, it's $172 (around 5%).
The ruling by Victoria's Essential Services Commission (ESC) affects households on a standing offer electricity plan, also known as the Victorian Default Offer (VDO).
The VDO is set by the regulator each year on 1 July to ensure Victorians have "access to a reasonable electricity deal, even if they are unable or unwilling to engage in the retail market."
It also serves as a reference price, helping people compare other offers on the market, which are often cheaper than the standing offer.
Around 510,000 households and 61,000 small businesses are currently on the VDO.
Here's a look at the draft price changes for Victorian households by distributor.
| Period | AusNet | CitiPower | Jemena | Powercor | United Energy | Victorian average |
|---|---|---|---|---|---|---|
| 2025–26 (final) | $1,908 | $1,546 | $1,638 | $1,703 | $1,579 | $1,675 |
| 2026–27 (draft) | $1,863 | $1,500 | $1,592 | $1,655 | $1,536 | $1,629 |
| Change in $ | -$45 | -$46 | -$46 | -$48 | -$43 | -$46 |
| Change in % | -2% | -3% | -3% | -3% | -3% | -3% |
Why are electricity prices in Victoria going down?
The small drop is mainly due to lower environmental costs.
That said, the regulator will be watching all factors that affect energy prices, which could still influence the final decision in May.
This includes the conflict in the Middle East, which is pushing up global gas prices and could, in turn, affect energy bills here in Australia.
You can read our explainer for more context if you're curious about how it's all interlinked.
"The commission has made this draft decision with the best available data and with consideration for long-term interests of Victorian consumers with respect to price, quality and reliability of essential services," ESC chairperson and commissioner Gerard Brody said in a media release.
If you're someone who is willing and able to review your electricity plan each year, you'll be able to find cheaper deals. But if you don't want to be swapping deals each year, the default offer is a good, fair option.
Haven't compared energy plans in over 12 months?
You could be overpaying.
What about the other states?
Normally, Victoria releases draft prices after the Australian Energy Regulator, which covers New South Wales, South East Queensland, and South Australia.
It looks like we'll have to wait until next Thursday (17 March) for the details.
Given that wholesale energy prices have stayed fairly stable in recent months, there's a good chance we'll see similar trends - and possibly a price drop - across those regions too.
However, Gavin Dufty, national director of energy policy and research at St Vincent de Paul Society, told the Australian Financial Review that energy bill relief may be temporary.
"We've got a wall of capex coming next financial year and onwards for transmission, for electricity road map costs and all that," said Dufty.
"So this is not a bad outcome – hopefully it's the same [in the other states]. But there's a lot of uncertainty – one swallow doesn't make a spring."
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