Victoria is poised for a reduction in default electricity prices across the state in the coming months, with the Essential Services Commission recommending cuts across all five of the state’s electricity distribution zones.
According to the draft decision released by the commission on 12 March, households will benefit from a saving of $46 per year or 3%while small businesses will benefit from a saving of $172 per year or 5%, if the new prices are applied from 1 July.
The reduction will be felt across the state, rather than just in one of the electricity network areas.
Households will see a reduction of between $43 and $48 per year, depending on the zone while small businesses will see a reduction of between $165 and $179 per year, depending on the zone.
Customers who continue to use the default tariff are not the only ones affected by the change.
In addition to serving as the benchmark that retailers must use when promoting market offers, the Victorian Default Offer serves as a safety net price for consumers who don’t shop around or find it difficult to switch plans.
Approximately 510,000 households, or 17% of the total and 61,000 small businesses or 21% are presently on the default offer, according to the commission.
Additionally, it establishes the maximum price for about 190,000 people who reside in embedded networks, such as apartment complexes, retirement communities and caravan parks where locals frequently are unable to select their own electricity supplier.
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However, Gerard Brody, who is the chairperson and commissioner at the Essential Services Commission, stated in a statement, “The default offer provides people with the assurance that they will continue to get a fair deal without having to test the market each year.”
The draft is currently out for consultation until 10 April, and a decision is to be made in May.
If the decision is confirmed, the new prices will come into effect on 1 July 2026, providing Victorian households and small businesses.
