Victorian Default Offer (VDO) 2026–27: prices, solar soak and what it means for your bill

The Victorian Default Offer (VDO) is the regulated electricity price set by the Essential Services Commission (ESC) for Victorian households and small businesses on standing offers, and it is the reference price that every Victorian market offer must be compared against. The ESC published its final decision for 2026–27 on 25 May 2026; prices apply from 1 July 2026 to 30 June 2027. For a typical household on a flat rate using 4,000 kWh a year, the ESC estimates the annual VDO bill at about $1,591, down from $1,675 in 2025–26 (around 5% lower). Typical small business bills (10,000 kWh a year) fall about 6%, from $3,620 to $3,380. Prices differ across the five distribution zones, and the domestic three-period time-of-use tariff includes a lower-priced solar soak period from 11 am to 4 pm.

Who is on the VDO

You pay VDO prices if you are a Victorian residential or small business electricity customer on your retailer's standing offer (a default contract you did not actively choose, or one you stayed on after a plan ended). Most Victorian households are on market offers instead. Those are not price-capped, but their price comparison must be stated against the VDO.

The VDO does not apply to:

• Gas (there is no regulated default gas price)
• Most embedded networks (apartment blocks, caravan parks and similar have separate rules)
• Large business customers

Distribution zones

The VDO is set separately for each of Victoria's five electricity distribution zones, because network charges differ:

Your distributor is named on your bill. If you are unsure, the ESC and Victorian Energy Compare can identify it from your address.

Tariff structures in the VDO

For each zone the ESC sets daily supply charges and usage rates for several tariff structures, including:

• Flat rate (with or without a controlled load)
• Time-of-use, including a domestic three-period tariff with peak, off-peak and solar soak periods

The 2026–27 solar soak usage charge, which applies from 11 am to 4 pm every day on the domestic three-period time-of-use tariff, is set by zone (ESC decision, 2026–27):

Check the ESC's VDO page for the peak, off-peak and supply charges in your zone; they are not reproduced here.

Separately, Victoria introduced the Midday Power Saver standing offer from 1 October 2026, with free electricity from 11 am to 2 pm for opted-in smart-meter households. It is a different product from the VDO time-of-use tariff; see Solar Sharer and Midday Power Saver.

Worked example: VDO versus a market offer

Illustrative figures only. The ESC's typical household VDO bill is $1,591 at 4,000 kWh on a flat rate. A market offer stated as "10% less than the VDO" would come to about:

• $1,591 × 0.10 = $159 less
• $1,591 − $159 = about $1,432 a year at 4,000 kWh

If your household uses 6,000 kWh a year, the dollar gap may differ because the offer's supply charge and usage rate may be balanced differently from the VDO. A plan with a low supply charge and a high usage rate tends to look better at low usage and worse at high usage. Use the reference price checker for the headline number, then compare on your own usage at Victorian Energy Compare as shown in the step-by-step comparison.

Victorian rules that sit alongside the VDO

The VDO is one part of Victoria's retail framework under the Energy Retail Code of Practice, which the ESC administers. Features that affect your bill include:

• Best offer messages: retailers must tell you on your bill whether they have a cheaper plan for your usage.
• Reforms from 1 October 2026: the ESC announced that retailers must move customers to their cheapest plan if they are receiving payment difficulty support, or have been in debt for more than three months and owe more than $1,000; must offer a payment method other than direct debit on each plan; and may switch or encourage customers to a best offer expected to save at least $50 a year (previously $22).
• Disconnection threshold: from 1 October 2026 the minimum debt for which a household can be disconnected rose from $300 to $1,000.

See hardship and payment plans for the wider protections.

What to do after the VDO change

1. Check your bill: does it say "Victorian Default Offer" or "standing offer"? If so, you are likely paying VDO prices.
2. Look at the best offer message on your latest bill.
3. Compare on Victorian Energy Compare using your NMI or uploaded smart meter data.
4. If you have solar or can shift usage to midday, compare time-of-use, solar soak and Midday Power Saver options.

FAQ

Does the VDO cap market offers in Victoria?

No. It sets standing offer prices and acts as the reference price. Market offers can be above or below it but must show the comparison.

How often does the VDO change?

Usually once a year from 1 July, after a draft and final decision by the ESC.

Is the typical $1,591 figure what I will pay?

Only if your usage and zone match the ESC's typical assumptions and you are on the flat-rate VDO. It is an average across zones for comparison purposes.

Does the VDO cover gas?

No. Compare gas plans separately on Victorian Energy Compare.

Sources

• Essential Services Commission — Victorian Default Offer 2026–27 final decision (25 May 2026) and retail reforms
• Victorian Energy Compare — compare Victorian offers with your usage
• Energy and Water Ombudsman Victoria — complaints about Victorian retailers