Electricity prices in Victoria set to drop by 5% — but you could save even more
Key takeaways
- The Victorian energy regulator has confirmed electricity prices will fall by an average of 5% ($84) from 1 July 2026.
- The change applies to the Victorian Default Offer and will directly affect around 17% of Victorian households.
- If you're on a default offer, you could save even more by shopping around for a better energy deal.
Victoria's Essential Services Commission (ESC) sets electricity prices each year on 1 July under the Victorian Default Offer (VDO).
The default offer is designed 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 acts as a benchmark for retail energy offers, but more on that shortly.
First, here's a look at how much electricity prices will fall across different distribution networks for those on a default offer:
| AusNet | CitiPower | Jemena | Powercor | United Energy | Victorian average | |
|---|---|---|---|---|---|---|
| 2025–26 | $1,908 | $1,546 | $1,638 | $1,703 | $1,579 | $1,675 |
| 2026–27 | $1,748 | $1,481 | $1,563 | $1,633 | $1,529 | $1,591 |
| Change in $ | -$160 | -$65 | -$75 | -$70 | -$50 | -$84 |
| Change in % | -8% | -4% | -4% | -4% | -3% | -5% |
These prices are based on estimates for an average household using 4,000kWh a year on a flat tariff and paying the default offer.
The final default offer prices for NSW, South-East QLD and South Australia will be announced tomorrow (26 May) by the Australian Energy Regulator.
Why are electricity prices falling in VIC?
The main reason is that environmental costs have almost halved compared to 2024-2025.
This is what retailers pay to support state and renewable energy programs.
Besides that, wholesale energy costs have more or less remained stable despite global tensions.
And network costs are slightly lower - this is what is charged for delivering electricity to households.
Another 1 July rule worth knowing about
When the new prices kick in, energy retailers will also need to make sure customers who've stayed on the same plan for four or more years are paying a "reasonable price".
This will be part of Victoria's Energy Retail Code of Practice.
Retailers will look at a few factors when deciding what counts as a reasonable price, including:
- The median energy price paid by their other customers
- Their cheapest available
- Any extra benefits included with the plan
What do I do if I'm on a default offer?
As we mentioned, the default offer is a safety net for households that don't shop around.
But if you are looking to save even more than the price drop, your best option is to compare energy plans to see if you can find a better deal.
For example, the cheapest electricity plan in our database right now is 21% lower than the default offer.
ESC chairperson and commissioner Gerard Brody has similar advice on shopping around.
"Victoria's default electricity prices are set independently of energy retailers, which ensures all Victorian households and small businesses have access to a fair deal," Brody said.
"You can find a better deal by shopping around, but the default offer provides a simple, fair option to all households and small businesses."
What if I'm not on a default offer?
Energy retailers also tend to review electricity prices around this time each year for their retail offers. If changes are made, they typically take effect from 1 August.
If you're on a retail (market) offer, it's a good time to check whether you can get a better energy deal.
Beyond cheaper rates, it can also be worth looking out for sign-up bonuses to sweeten the switch.
Have a look at some of the best energy deals available right now if you're keen to see what's on offer.
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