The Essential Services Commission (ESC) is seeking input from industry, community groups and other interested parties on its approach to setting Victoria’s default electricity price for 2025–26.
The commission independently sets the Victorian Default Offer each year. The Victorian Default Offer is the default electricity price Victorian households and small business customers pay if they haven’t chosen a different market offer and is based on the efficient cost of the sale of electricity by a retailer.
ESC Chairperson, Gerard Brody, said the Victorian Default Offer is an important consumer safeguard.
“The Victorian Default Offer provides price protections for electricity customers who do not engage with the energy market and acts as a benchmark price to compare market offers against,” Mr Brody said.
“Each year we review the different costs that make up electricity bills, including wholesale electricity costs, the cost of getting energy to customers, and retailer operating margins. We want to hear from stakeholders about the approach we use to set our cost benchmarks and whether they can be improved.”
In June 2024, the Victorian Default Offer applied to around 334,000 (or 13 per cent of) households and 57,000 (or 20 per cent of) small businesses. The Victorian Default Offer is also a maximum price for most customers in an embedded network, covering around 180,000 customers.
Mr Brody said that while the Victorian Default Offer is a valuable consumer protection, Victorians should still shop around for the best electricity offer available to them.
“While the Victorian Default Offer plays a key role as a benchmark price, the vast majority of electricity customers are on market contracts, which are often less expensive than the Victorian Default Offer. I’d urge all Victorian energy customers to make a habit of regularly visiting the free and independent Victorian Government energy price comparison site Victorian Energy Compare to find the best energy deal based on their own unique circumstances.”
The 2025–26 Victorian Default Offer draft decision will be published for consultation in March 2025, with a final decision in May 2025.
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