Estimated reading time: 7 minutes
The Victorian Default Offer (VDO) was introduced in 2019 as a safety net to protect Victorian households from excessive energy prices. But seven years later, many Victorians still don’t understand what the VDO actually is – or more importantly, how much money they’re leaving on the table by staying on it. If you haven’t switched in a year or two, chances are you are paying the VDO rates.
Is this you? Do you have the Default VDO plan? OR Haven’t switched energy plans in years, you could be overpaying by over $1,500 per year for dual fuel households.
What is the Victorian Default Offer in 2026?
The VDO is a price cap set by the Essential Services Commission (ESC) – it’s the maximum amount energy retailers can charge customers who don’t actively choose a market plan. It serves two purposes:
- A safety net price for vulnerable consumers who don’t shop around
- A reference price that helps consumers compare different market offers
The VDO is deliberately set higher than competitive market rates to encourage Victorians to shop around. It was never designed to be a good deal just a fair price.
The Real Cost: Electricity Savings Across Victoria
We analysed electricity costs for typical Victorian households across five major distribution networks. The savings available by switching from the VDO to the cheapest market offer are substantial:
| Town | Distributor | VDO Yearly Cost | Best Plan Yearly Cost | Annual Savings |
| Camberwell | Citipower | $1,879 | $1,494 | $386 |
| Bendigo | Powercor | $2,070 | $1,651 | $419 |
| Heidelberg | Jemena | $2,000 | $1,593 | $408 |
| Traralgon | Ausnet | $2,331 | $1,843 | $489 |
| Moorabbin | United Energy | $1,931 | $1,526 | $404 |
Key Finding: Victorian households can save between $386 and $489 annually on electricity alone by switching from the VDO to the cheapest available plan in their area. That’s an average saving of over $420 per year just by comparing plans.
Residents in regional areas like Traralgon face higher overall costs but also have access to the largest potential savings. Even in well-serviced metro areas like Camberwell, households are leaving nearly $400 on the table each year.
Even Bigger Savings on Gas
If you thought electricity savings were impressive, wait until you see the gas comparison. The gap between Victoria’s Standing Offer (it’s called a Standing Offer for Gas) and the cheapest market rates for gas is even more dramatic:
| Town | Distributor | VDO Yearly Cost | Best Plan Yearly Cost | Annual Savings |
| Camberwell | AGL South / Multinet 1 | $3,212 | $2,072 | $1,140 |
| Bendigo | Tru Central / Ausnet Central 1 | $3,221 | $2,041 | $1,180 |
| Heidelberg | TRU East / AGN Central 2 | $3,090 | $2,040 | $1,050 |
| Traralgon | Pacific Blue Southeast / AGN Central 1 | $3,076 | $2,040 | $1,035 |
| Moorabbin | Pacific Blue Metro / Multinet 2 | $3,213 | $2,072 | $1,141 |
Staggering Savings: Victorian households with gas connections can save between $1,035 and $1,180 per year by switching from the Standing Offer to the best available gas plan. These savings dwarf the electricity savings and represent a significant portion of annual household energy costs.
Combined Savings: For households with both electricity and gas, the total annual savings range from $1,421 to $1,669 depending on location. That’s enough to cover:
- A family holiday
- Several months of groceries
- Emergency home repairs
- Contributions to savings or retirement funds
Why the ACCC is Sounding the Alarm
The ACCC’s recent call to action isn’t just routine consumer advice. Energy prices across Australia have been rising, and the regulator is concerned that too many households are failing to shop around for better deals. The ACCC specifically urges households to compare and switch plans to help offset these price increases.
According to the ACCC, many consumers are on expensive standing offers or outdated market plans that no longer offer competitive rates. The combination of price rises and consumer inertia creates a perfect storm where households end up paying far more than necessary.
The data confirms the ACCC’s concerns. With savings of this magnitude available, it’s clear that many Victorian households haven’t compared their energy plans recently or don’t realise how much they could save.
Why Are So Many Victorians Overpaying?
Several factors contribute to the widespread overpayment on energy bills:
1. Set-and-Forget Mentality: Once households set up an energy plan, many never review it again. Energy retailers bank on this inertia, knowing that their most profitable customers are often those who never compare or switch.
2. Confusion About the VDO: Some consumers mistakenly believe the Victorian Default Offer 2026 is a good deal because it’s government-regulated. In reality, it’s simply a price cap on new offers designed to prevent exploitation, not to deliver competitive pricing. Beware if you are on an old plan. We have seen many cases where customers are paying more than the Default plan rates.
3. Complexity Overload: The energy market can feel overwhelming with dozens of retailers, hundreds of plans, and confusing discount structures. Many people give up before finding the best deal.
4. Loyalty Penalty: Energy retailers often reserve their best deals for new customers. Long-standing customers who have never switched may be paying premium prices without realizing it.
5. Move in: You moved in to a new home and haven’t switched since.
How to Find Your Cheapest Energy Plan
The good news? Finding a cheaper energy plan is easier than you think. Follow these steps:
Step 1: Gather Your Information
Find a recent energy bill. You’ll need to know your distributor, your postcode, and your average daily usage (both electricity and gas if applicable).
Step 2: Use a Comparison Service
Independent comparison services like Energy Umpire take the hassle out of comparing dozens of plans. We compare all available offers in your area and show you the genuine cheapest options based on your actual usage. Avoid commission based services as they offer biased advice.
Step 3: Check the Fine Print
Look beyond headline discount rates. Some plans offer big discounts but have high base rates. Others have conditional discounts that disappear if you pay late. Focus on the total estimated annual cost based on your usage.
Step 4: Switch Plans
Once you’ve found a better plan, switching is straightforward. Your new provider handles the process, and there are no physical changes to your connection. The switch typically takes 5-10 business days. It can be up to 60 days for gas.
Step 5: Set a Reminder
Energy prices and offers change regularly. Set a calendar reminder to compare plans again in 12 months at the latest to ensure you’re always getting the best available rate.
Don’t Leave Money on the Table
The evidence is clear: Victorian households can save substantial amounts by moving away from the Default Offer to the cheapest available market plan. With electricity savings averaging over $400 and gas savings exceeding $1,100 annually, the financial impact of switching is significant.
The ACCC’s warning is timely. As energy prices continue to rise, finding the best available deal isn’t just smart – it’s essential for managing household budgets. The difference between the VDO and competitive market rates shows exactly how much money you’re leaving on the table by not comparing.
Whether you’re in metropolitan Melbourne or regional Victoria, whether you’re with Citipower, Powercor, Jemena, Ausnet, or United Energy, there are better deals waiting for you. The question isn’t whether you can save money – the data proves you can. The question is: will you take action?
Ready to Stop Overpaying?
Energy Umpire makes it easy to find and switch to Victoria’s cheapest energy plans. Our independent comparison service analyses all available plans in your area and shows you genuine savings based on your actual usage – not misleading discount rates.
Get your free comparison today and discover how much you could save. With potential annual savings of up to $1,669 for households with both electricity and gas, isn’t it time you found out what you’re really paying?
Data sources: Energy Umpire analysis 2026, ACCC Electricity Market Monitoring Report December 2025. All figures based on average household usage assumptions under VDO calculations. Actual savings may vary based on individual usage patterns.
