In Victoria, many people assume they’re already on the best energy plan. But in reality, thousands of homes and businesses are quietly being charged more than the Victorian Default Offer (VDO), and most don’t even know it.
Some people only notice something is off when comparing their costs with plans promoted by other retailers, including options such as Lumo Electricity Rates, which often highlight how wide the price differences can be.
The VDO is set by the government as a benchmark for a “fair” price for electricity. It’s reviewed each year and meant to act as a safeguard against inflated pricing. But just because it exists doesn’t mean your retailer is keeping your plan under it.
If you’ve recently moved premises or set up a new account, you might be placed on a standing offer that charges more than the VDO. In these cases, acting fast to switch energy supplier may save you hundreds, or even thousands, a year. If you’re starting a new service, requesting a new AGL electricity connection or a same-day electricity connection can also help reduce costly delays.
Let’s break down how to spot overpriced plans and what steps you can take right now.
What Is the Victorian Default Offer (VDO)?
The Victorian Default Offer is a government-regulated electricity price intended to keep energy costs fair for most households and small businesses.
It’s not necessarily the lowest price on the market; instead, it acts like a reference point. If you’re paying more than the VDO, it’s a red flag that your plan may be out of date or simply overpriced.
For 2025–2026, typical VDO rates include:
| Distribution Zone | Daily Supply Charge | Usage Charge (per kWh)
|
|---|---|---|
| AusNet Services | $1.4146 | $0.3477 (block rate) |
| CitiPower | $1.2407 | $0.2733 |
| Jemena | $1.2301 | $0.2972 |
| Powercor | $1.3684 | $0.3009 |
| United Energy | $1.1648 | $0.2884 |
More details can be found on the Essential Services Commission (ESC) website, including rates for controlled loads, time-of-use tariffs, and peak periods.
How Do You Know If You’re Paying Too Much?
Here’s a quick way to tell:
- Grab your latest electricity bill.
- Check the name of your plan and whether it’s a standing offer or a market offer.
- Look at your total yearly cost – not just the unit rate.
- Compare your annual costs with the latest VDO prices for your area.
- If your costs are higher, it’s time to switch energy supplier.
Tip: If you’re on an older plan or you’ve never switched, there’s a high chance you’re overpaying.
Real Example: How Much Could You Be Overpaying?
Let’s say you run a small retail shop in Melbourne using about 4,000 kWh of electricity each year. On a typical VDO plan, your yearly bill might be around $1,600–$1,770, depending on your network zone.
But if you’re on an outdated or legacy plan, you could be paying:
- $2,600+ annually on electricity alone
- Plus additional fixed fees and late-payment penalties
The difference can easily reach $800–$1,200 annually – money that could be saved simply by changing plans. Some business owners compare market options, such as the Energy Australia Secure Saver Plan, which often show how different retailers stack up on fixed and variable costs.
What Makes Your Bill Go Over the VDO?
Several factors could be causing your energy bill to go over the government’s price cap:
Common causes include:
- Being placed on a standing offer automatically
- Plan rollovers after a contract ends
- Loyalty discounts expiring quietly
- Old meter readings or billing delays
- Not reviewing your plan for over 12 months
Energy retailers don’t always notify you when a better plan is available. That’s why it’s up to you to compare plans regularly or get help from someone who can.
What If You Just Moved or Changed Address?
If you’ve recently moved to a new home or business, the default electricity connection might not be the best one. In fact, many new connections are set up under standing offers by default, often well above the Victorian Default Offer.
To avoid this, request an AGL Energy Plan through a broker like Deal Expert. We compare multiple retailers, not just AGL, and help you find a compliant plan that suits your site’s needs.
And if you’re short on time, we can even organise a same-day electricity connection so your move goes ahead without delays.
Why the VDO Isn’t a Long-Term Strategy
While the VDO protects people from excessive charges, it’s not always the cheapest deal in the market. Many retailers offer market offers that are well below the VDO, with better usage rates, off-peak discounts, and bundled services.
If you stay on the VDO, you’re playing it safe… but not smart. You might miss out on:
- Early payment discounts
- Flexible billing options
- Off-peak tariffs
- Solar feed-in bonuses
- Green power upgrades
Many customers exploring solar or daytime consumption patterns also look into the EnergyAustralia Secure Saver plan to compare costs and features.
The best strategy is simple: review regularly and Switch Energy Supplier whenever a better plan becomes available.
How Often Should You Review Your Energy Plan?
We recommend checking your plan every 6 to 12 months – or any time you:
- Move to a new home or commercial site
- Experience a big jump in your bill
- Change your opening hours or energy usage
- Install new equipment or solar panels
- Haven’t switched in over a year
Even a few cents per kWh can add up to hundreds over a year, especially for small businesses.
Why Businesses Should Pay Extra Attention
Small businesses in Melbourne often run long hours, especially in retail, hospitality, and services. Energy usage is consistent, and so are the bills. Many business owners don’t realise their fixed supply charges have gone up until they compare side by side.
Some business owners compare multiple retailers, including those with packages similar to Lumo electricity rates, to see if newer commercial plans offer better value. Deal Expert helps Melbourne businesses avoid this trap by actively managing the switching process and providing advice that fits your needs.
How Deal Expert Helps You Save
As an independent energy comparison service, Deal Expert works with a wide range of retailers. That means you get unbiased access to plans that meet your budget, contract flexibility, and usage habits.
Here’s what we help with:
- Comparing your current plan with the Victorian Default Offer
- Highlighting areas where you’re overpaying
- Recommending better-value market offers
- Setting up your new AGL electricity connection or alternatives
- Organising a same-day electricity connection when needed
- Supporting households and businesses through every step
Many customers also ask us to explain the differences between market options such as the Energy Australia Secure Saver plan so they can make informed decisions before switching.
Summing Up: What’s Next?
The truth is, the energy market doesn’t reward people who stay loyal or quiet. It rewards those who review, compare, and take action.
So, if you’re running a café in Fitzroy, setting up a new office in Docklands, or simply reviewing your home bills in the suburbs, now’s the time to take ten minutes and see if you’re above the Victorian Default Offer.
Switch energy supplier today, and let Deal Expert help you find a smarter, cheaper energy plan for your Melbourne site.