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Electricity costs in Victoria

Victoria is one of the most competitive electricity markets in Australia, yet the average household still pays between $1,600 and $2,200 per year. With five separate distribution zones and dozens of active retailers, there is a wide spread between the cheapest and most expensive plans. Many Victorian households remain on outdated default contracts that cost hundreds of dollars more each year than the best available market offers.

Price regulation in Victoria

Victoria uses the Victorian Default Offer (VDO), set annually by the Essential Services Commission (ESC). The VDO replaced the old standing offer framework and acts as a price cap for customers who have not actively chosen a market deal. All Victorian retailers must publish their prices as a percentage above or below the VDO, which makes comparison much easier. Despite this, the VDO itself is not the cheapest option — market offers typically sit 5-20% below the VDO depending on your distributor zone.

Distributors and retailers in Victoria

Victoria has five electricity distributors: CitiPower (Melbourne CBD and inner suburbs), Powercor (western Victoria), AusNet Services (eastern and north-eastern Victoria), Jemena (north-western Melbourne), and United Energy (south-east Melbourne and Mornington Peninsula). Your distributor determines your network charges and which offers are available to you. Major retailers include AGL, Origin Energy, EnergyAustralia, Simply Energy, Alinta Energy, and Red Energy, alongside smaller players like Tango Energy, Amber Electric, and Energy Locals who often undercut the big three on price.

Common tariff types

Victorian customers are typically on a single rate (flat) tariff, a time of use (TOU) tariff, or a flexible pricing tariff. Since 2021, all new smart meter customers in Victoria have been assigned a TOU tariff by default. TOU tariffs charge a higher rate during peak periods — usually weekday afternoons between 3 pm and 9 pm — and lower rates during off-peak and shoulder periods. If you have a smart meter and are still on a flat rate, switching to TOU could save money if you can shift usage to off-peak hours, particularly overnight.

Victoria-specific tips

Check your bill for the VDO comparison — every Victorian electricity bill must show what you would pay on the VDO. If your bill is close to or above the VDO amount, switching to a market offer could deliver meaningful savings. Victoria also has the highest smart meter penetration in the country, so most households can access TOU pricing. If you have rooftop solar, compare feed-in tariff rates carefully — the minimum rate set by the ESC is only a floor, and several retailers offer premium feed-in rates. Finally, the Victorian Energy Compare website is a free government tool that can complement your BillDecoder analysis.

State energy market information is general guidance current as of March 2026. Verify specific rates and regulations with the ESC or your state regulator.