A FURTHER reduction in the Victorian Default Offer (VDO) means over half a million households and small businesses stand to benefit from lower power prices in Victoria from July 1.
The final VDO for 2026–27 will be on average five per cent lower than last year for households, cutting $84 off their annual electricity bill.
For small businesses the price is down on average six per cent, cutting $241 off their annual electricity bill.
This represents an even greater reduction than initially projected in the draft VDO in March.
Around 512,000 households and 62,000 small businesses currently on the VDO will benefit directly from an immediate price cut when the new rates take effect.
The VDO also serves as a reference price for market electricity rates, putting the onus on private energy retailers to pass through the reductions to other customers from August 1 this year.
This year’s VDO price drop is largely due to improvements in energy efficiency, led by nation-leading policies like the Victoria Energy Upgrades program.
The VDO is a regulated power price introduced by the state government in 2019, which cut standing offer power prices by 24 per cent in its first year.
This 2026-27 VDO is 14 per cent cheaper than the standing price it replaced in 2019.
Victoria’s VDO is expected to remain much lower than the national Default Market Offer.
Victoria consistently has the lowest energy prices in the country, led by a record investment in renewables.
Minister for Energy and Resources Lily D’Ambrosio said Labor is investing in the efficient, renewable energy that Victoria needs to make life cheaper for Victorians.