The Essential Services Commission is seeking feedback on its approach to setting Victoria's default electricity price for 2026-27 and the suitability of a regulated free power period for residential customers.
The commission independently reviews the Victorian Default Offer (VDO) each year. It is a fair, independently set electricity price that:
- gives Victorians access to a reasonable electricity deal, even if they are unable or unwilling to engage in their retail market
- acts as a reference price so customers can more easily compare different deals in the market
- is the maximum amount electricity retailers can charge customers in an embedded network, such as an apartment complex, retirement home or caravan park.
Approximately 15 per cent of households (445,000) and 19 per cent of small business customers (54,000) are currently on the VDO. There are approximately 190,000 customers in embedded networks in which the VDO applies as a maximum charge.
The commission will use the feedback about the VDO to inform its draft decision, which will be published for consultation in March 2026.The final VDO will be announced in May 2026.
Free power period
The Commission is also seeking feedback on the suitability of a regulated free power period for residential electricity customers in the middle of the day, at the request of the Minister for Climate Action, Energy and Resources and the State Electricity Commission.
The time of day that electricity is consumed impacts wholesale and network costs, which are the two biggest components of the VDO. Residential energy consumption tends to peak in the morning and evenings and is lower in the middle of the day.
A free power period may help shift when consumers use electricity, reducing demand at the most expensive times of day. This could put downward pressure on wholesale electricity prices and make more efficient use of the network.
The Commonwealth Government is consulting on a similar proposal.
Victorians can have their say on the commission's approach to the VDO for 2026–27 and the suitability of a free power period by visiting Engage Victoria by Friday, 12 December 2025.
Quotes attributable to Essential Services Commission Chairperson and Commissioner Gerard Brody
"The Victorian Default Offer is set independently of retailers, which ensures all Victorian households and small businesses have access to a fair and reasonable price. It also gives people confidence that they'll continue to receive a fair deal without having to test the market each year."
"The default offer isn't the cheapest on the market, as retailers look to attract new customers by offering a low price. But it is a fair price and one that won't increase by more than the Essential Service Commission allows, which means it will stay fair."
"We're seeking feedback from Victorians on the suitability of a regulated free power period and welcome the knowledge and perspectives of the community and industry."
