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Victorian Default Offer

The Victorian Default Offer exists to protect Victorians from paying unfair energy prices.

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What is the Victorian Default Offer? Overview
How does the VDO affect you? Read more

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Quick facts about the reference price

  • What is it? An initiative introduced by the Victorian government to help ensure consumers aren't paying too much for their energy bills.
  • When did it happen? 1 July 2019.
  • Who does it affect? All Victorian households and small business customers.

What is the Victorian Default Offer?

The Victorian Default Offer (VDO) is an initiative introduced by the Victorian government to help ensure consumers aren't paying too much for their energy bills. The energy regulator in Victoria says that it's designed to be a fair price for electricity compared to some of the expensive "standing offers" many Victorians were on previously.

The VDO is the equivalent of the "reference price" introduced in other states. It took effect on 1 July 2019, and more than 100,000 households were shifted from their current energy plans to the VDO.

How does the VDO affect you?

The VDO and the laws surrounding it will affect you in a couple of ways. First, even if you don't want to compare energy plans at all and just go with the default, you won't end up paying more than the rates dictated by the VDO.

Second, energy providers are now required to inform you whether you're on their best plan every three months or every four months for gas bills. They'll also tell you how much you stand to save by switching to their best plan. In addition, providers are required to give you five days' notice on any price or benefit changes that might affect you.

Standing offers vs Market offers

Although the VDO is a fair price, it probably isn't the best price you can get. Many market offers available from providers will have rates that are lower than those on the VDO.

This is by design. It's meant as a protection to stop customers paying ridiculously large sums for electricity, not to be the most competitive deal on the market. You're generally better hunting down a market offer if you can.

Energy RetailerCheapest Market OfferVictorian Default OfferSavings
Elysian Energy$1,089 (23% less than VDO)
The Good Life
$1,420$331
Momentum Energy$1,220 (14% less than VDO)
Self Serve
$1,420$200
Alinta Energy$1,221 (14% less than VDO)
Home Deal
$1,420$199
Powerclub$1,230 (13% less than VDO)
Powerbank Home Flat
$1,420$190
Tango Energy$1,234 (13% less than VDO)
EasySave
$1,420$186

Price assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Estimated price includes any discount that may be available.

How do I know if I'm on a standing offer?

If you haven't checked your energy plan in a long time, purchased a new one or moved, chances are good that you've fallen onto a standing offer. To confirm whether you're on a standing offer, simply check your last energy bill. It will have your contract type listed on it.

Bottom line

To summarise, here are the most important points about the VDO:

  • No customer can be charged more than the VDO dictates if they don't stay on top of their energy plans.
  • You might pay more than the VDO with some market offers from providers.
  • The VDO will differ depending on what distribution zone you're located in.
  • Energy retailers must compare their energy plans to the VDO when advertising rates.

Using the VDO to compare

The percentage shown describes how much the price of the plan is compared to the VDO.

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