Victorian households set for energy bill relief as default price offer falls

Millions of struggling households will get “welcome relief” on their power bills after new energy prices were revealed.

Draft figures released by the Essential Services Commission propose a 3 per cent reduction on the Victorian Default Offer (VDO), which is the maximum households will pay for electricity.

Under this proposal, households will save about $46 a year.

Small businesses are set to save 5 per cent or $172 a year.

If the power prices get through a final consultation period by April 10, households and businesses will start saving from July 1, 2026.

The draft default prices for NSW, South Australia and South- East Queensland are set to be determined later this month.

About 510,000 households and 21 per cent of small businesses are on the VDO.

Essential Services Commission chairman Gerard Brody said the VDO was set independently of energy retailers to ensure fair and reasonable energy prices.

“The default offer gives people confidence that they’ll continue to receive a fair deal without having to test the market each year,” Mr Brody said.

“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.”

Canstar data insights director Sally Tindall labelled it welcome relief for households.

“Who would have thought electricity prices would be the bill to break the price-hike trend, but that’s exactly what the regulator is proposing,” she said.

“Meeting government renewable targets has become cheaper for the retailers and the regulator wants to pass these savings on to households.”

Despite prices falling, Ms Tindall said Victorians could get a better deal on their power bills if they shopped around.

“While any drop in electricity bills is welcome, the reality is that the default offer is still far from the cheapest option,” she said.