Victoria has the most competitive retail electricity market in Australia, with over 30 active retailers (including AGL, Origin, EnergyAustralia, Alinta, Red Energy, 1st Energy, Arcline by RACV) and five distribution networks. Prices are regulated by the Essential Services Commission (ESC) through the Victorian Default Offer (VDO), which sets the maximum standing offer price and serves as the reference for advertised discounts.
The VDO for 2025-26 set the average residential flat tariff at $1,675 per year, a 1% increase on the previous year. From July 2026, the ESC introduced the new Smart Rate tariff structure with lower midday rates between 11am and 4pm, a shorter evening peak from 4pm to 9pm, and the removal of residential demand tariffs. The 2026-27 VDO proposes a further reduction of approximately 3%.
Current reference prices in Victoria (VDO 2025-26)
The Victorian Default Offer is set separately for each of the five distribution networks. Unlike the DMO in other states, the VDO is a single reference price that applies regardless of your tariff type, with the ESC calculating separate VDO prices for flat rate, time-of-use, and the new Smart Rate structures.
| Network | Area covered | VDO annual (flat) |
|---|---|---|
| CitiPower | Melbourne CBD, inner suburbs | $1,511/year |
| Powercor | Western Victoria, outer western Melbourne | $1,695/year |
| Jemena | Northern and western Melbourne | $1,651/year |
| United Energy | South-eastern Melbourne, Mornington Peninsula | $1,639/year |
| AusNet Services | Eastern Victoria, outer eastern Melbourne | $1,878/year |
CitiPower customers in inner Melbourne pay the least, while AusNet Services customers in the outer east pay the most, a gap of roughly $367 per year for the same usage. This reflects the difference in network costs between a dense urban area and a larger, more spread-out region.
Source: Essential Services Commission, Victorian Default Offer Price Review 2025-26, published May 2025. The 2026-27 VDO is expected to reduce prices by approximately 3% across all networks.
Our take on electricity in Victoria
Victoria has the strongest retail competition in the country, which means the gap between the VDO and the cheapest market offer is significant. The most competitive market offers typically sit 15% to 25% below the VDO, which translates to $250 to $400 per year in savings for an average household. If you are on the VDO standing offer, you are paying more than you need to.
The new Smart Rate tariff from July 2026 is worth investigating if you are home during the day. The lower midday rate (11am to 4pm) effectively rewards households that can run appliances during solar hours, even if they do not have solar panels themselves. For retirees, work-from-home households, and anyone with a daytime routine, the Smart Rate could reduce bills meaningfully.
Victoria also has the best solar feed-in tariff competition. With over 30 retailers competing for solar customers, feed-in rates range from 3 to 12 cents per kWh. The difference on a typical 6kW system can be $200 or more per year.
Check what plans are available at your address
Enter your postcode to compare electricity retailers in your area of Victoria.
Compare plans nowDistribution networks in Victoria
CitiPower (Melbourne CBD and inner suburbs)
CitiPower covers the Melbourne CBD and surrounding inner suburbs including South Melbourne, Carlton, Fitzroy, Richmond, South Yarra, St Kilda, and Prahran. It is the smallest network by geography but one of the most densely populated, which keeps network costs low. CitiPower customers consistently have the lowest reference prices in Victoria.
Powercor (Western Victoria)
Powercor covers western Melbourne suburbs (Footscray, Sunshine, Werribee, Geelong corridor) and all of western Victoria including Ballarat, Bendigo, and the western districts. It is the largest network by geographic area. If you live west of the CBD or in regional western Victoria, you are on Powercor.
Jemena (Northern and western Melbourne)
Jemena covers the northern and north-western suburbs of Melbourne including Brunswick, Coburg, Essendon, Broadmeadows, and the growth areas around Craigieburn and Sunbury. It also extends to Melbourne Airport. A relatively compact network with moderate pricing.
United Energy (South-eastern Melbourne)
United Energy covers the south-eastern suburbs from Malvern and Caulfield through to Frankston and the Mornington Peninsula. If you are south-east of the CBD, including suburbs like Glen Waverley, Dandenong, Cranbourne, and the Bayside area, you are on United Energy.
AusNet Services (Eastern Victoria)
AusNet covers the outer eastern suburbs of Melbourne (Knox, Ringwood, the Yarra Valley) and all of eastern Victoria including the Latrobe Valley, Gippsland, and the alpine regions. AusNet customers pay the highest reference prices of the five networks due to the large, sparse service area. The Latrobe Valley is where most of Victoria's remaining coal-fired generation is located.
Average electricity bills by city in Victoria
Victoria has five distribution networks, so the same appliance usage can cost noticeably different amounts depending on exactly where in the state you live, even within greater Melbourne.
| City / area | Network | VDO reference (flat, annual) | Typical cheapest market offer |
|---|---|---|---|
| Melbourne (CBD, inner suburbs) | CitiPower | $1,511/year | $1,130 to $1,280/year |
| Northern Melbourne (Brunswick, Essendon) | Jemena | $1,651/year | $1,240 to $1,400/year |
| South-eastern Melbourne, Mornington Peninsula | United Energy | $1,639/year | $1,230 to $1,390/year |
| Geelong, Ballarat, Bendigo | Powercor | $1,695/year | $1,270 to $1,440/year |
| Outer eastern Melbourne, Gippsland | AusNet Services | $1,878/year | $1,410 to $1,600/year |
Melbourne's inner suburbs on CitiPower have the lowest reference price in the state, a byproduct of a small, dense, low-cost-to-serve network. If you live in the CBD, South Melbourne, Carlton, Fitzroy, or St Kilda, you start from the cheapest baseline in Victoria.
Geelong, Ballarat, and Bendigo are all on Powercor, along with western Melbourne. Reference prices here sit roughly 12% above CitiPower, reflecting the larger, more spread-out service area covering regional Victoria as well as the western suburbs.
Outer eastern Melbourne and Gippsland on AusNet Services pay the most of any Victorian network, around 24% above CitiPower. This is also where most of the state's coal-fired generation is located, and the network covers the largest and most sparsely populated geographic area of the five.
What would you pay? Real scenarios for Victorian households
Single person in a Melbourne apartment (CitiPower, 2,500 kWh/year, no gas, no solar)
On the VDO standing offer: approximately $945 per year. On the cheapest market offer: approximately $710 to $790 per year. Potential saving: $155 to $235 per year.
Family of four in outer eastern Melbourne (AusNet, 5,000 kWh/year, gas heating, no solar)
On the VDO standing offer: approximately $2,350 per year. On the cheapest market offer: approximately $1,770 to $1,950 per year. Potential saving: $400 to $580 per year. This household should also compare gas plans, as dual-fuel discounts can add further savings.
Retirees in Geelong (Powercor, 4,000 kWh/year, 6.6kW solar system)
On the VDO with a basic feed-in rate of 4.5c/kWh: approximately $1,250 per year after solar credits. On a market offer with a competitive feed-in rate of 10c/kWh: approximately $920 to $1,020 per year. The feed-in tariff alone accounts for $200+ of the difference.
Tariff types available in Victoria
Flat rate (single rate): One price per kWh at all times. The simplest option and the default for most Victorian households. If you cannot shift your usage patterns, this is the safest choice.
Time of use (TOU): Different rates for peak, off-peak, and shoulder periods. Victoria's new TOU structure from July 2026 has peak between 3pm and 9pm on weekdays, shoulder from 7am to 3pm and 9pm to 10pm weekdays plus 7am to 10pm weekends, and off-peak from 10pm to 7am daily.
Smart Rate (new from July 2026): Victoria's new default tariff structure features a low midday rate from 11am to 4pm, a peak rate from 4pm to 9pm on weekdays, and off-peak at all other times. Residential demand tariffs have been discontinued. The Smart Rate is designed to encourage midday electricity use when solar generation is abundant, reducing costs for all customers by lowering peak demand.
Controlled load: A separate, cheaper rate for appliances on a dedicated circuit such as electric hot water systems. Check your bill to see if you have a controlled load, and make sure your plan includes a competitive controlled load rate.
Tips for comparing electricity plans in Victoria
Use Victorian Energy Compare. The state government runs Victorian Energy Compare, a free tool that shows estimated annual costs based on your actual smart meter data. It is more accurate than generic comparison tools because it uses your real usage profile.
Check the Best Offer notification on your bill. Victorian retailers are required to show on every bill whether a better plan is available from the same retailer. If you see a notification, it is worth investigating, but also compare across retailers, not just within your current one.
Consider the Smart Rate if you are home during the day. The new midday low rate (11am to 4pm) rewards households that can run high-draw appliances during those hours. Even without solar, this tariff can reduce bills for retirees and remote workers.
Solar customers: compare feed-in tariffs carefully. With 30+ retailers in Victoria, the range of feed-in rates is the widest in Australia. The difference between the worst and best feed-in tariff can be worth $200 to $400 per year on a typical 6kW system.
Dual-fuel discounts may not be the best deal. Some retailers offer a discount for bundling electricity and gas. But if their individual rates are not competitive, the "discount" may still leave you paying more than separate plans from different retailers. Always compare the total estimated annual cost, not the discount percentage.