Victorian Energy Price Increase 2025: Everything You Need to Know
Victoria’s energy bills are shifting once more in 2025—and the Victorian energy price increase is now officially in effect, directly impacting how much households and small businesses will pay starting 1 July 2025. Understanding why this Victorian energy price increase is happening, and what steps you can take to ease its impact, could be the key to managing your energy costs more effectively and avoiding unexpected financial strain.
What Is the Victorian Default Offer and How Will It Change in 2025?
What exactly is the Victorian Default Offer, and why does it show up in news headlines?
The Victorian Default Offer (VDO) is a regulated benchmark set by the Essential Services Commission (ESC). It’s a safety-net price for customers not on a negotiated market deal. Think of it as a reference point. Retailers can offer cheaper plans, but they use the VDO as a comparison yardstick.
From 1 July 2025 to 30 June 2026, the VDO has been updated. Here’s how the statewide averages compare:
Customer Type | Typical Annual Usage | 2024–25 VDO | 2025–26 VDO | Change | % Change |
Residential | 4,000 kWh | $1,655 | $1,675 | +$20 | ~+1% |
Small Business | 10,000 kWh | $3,530 | $3,620 | +$90 | ~+3% |
These averages, however, don’t tell the full story. Because electricity networks differ in their costs, the actual bill impact varies by distribution zone. Some households and businesses are seeing sharper energy price increases in Victoria than others.
Residential Customers (4,000 kWh/year)
Network Area | 2024–25 VDO | 2025–26 VDO | Change | % Change |
CitiPower (inner Melbourne) | $1,507 | $1,597 | +$90 | +6% |
Jemena (northwest metro) | $1,720 | $1,694 | –$26 | –1.5% |
Powercor (western Victoria) | $1,682 | $1,713 | +$31 | +1.8% |
AusNet (eastern Victoria) | $1,758 | $1,770 | +$12 | +0.7% |
United Energy (southeast metro & Mornington) | $1,610 | $1,646 | +$36 | +2.2% |
Households in CitiPower’s zone face the sharpest electricity price increase in Victoria (+$90), while Jemena customers see a small decrease.
Small Business Customers (10,000 kWh/year)
Network Area | 2024–25 VDO | 2025–26 VDO | Change | % Change |
CitiPower (inner Melbourne) | $3,114 | $3,291 | +$177 | +5.7% |
Jemena (northwest metro) | $3,719 | $3,729 | +$10 | +0.3% |
Powercor (western Victoria) | $3,632 | $3,770 | +$138 | +3.8% |
AusNet (eastern Victoria) | $3,811 | $3,822 | +$11 | +0.3% |
United Energy (southeast metro & Mornington) | $3,471 | $3,491 | +$20 | +0.6% |
Small businesses in CitiPower’s inner-Melbourne zone are hit hardest, with bills up nearly $180 a year.
Even if you’re not on the VDO, the benchmark often nudges market pricing. Use it as a reference when you compare offers this month.
Why Are Energy Prices Rising in Victoria?
This isn’t just a Victorian issue. A recent iSelect report shows that average household electricity prices across Australia rose from $0.361/kWh in June 2023 to $0.389/kWh in June 2025—a 7.63% increase, which outpaced inflation by more than 27%. The Australian Energy Regulator’s default market offer changes from July also pushed up bills: NSW households saw increases of up to 9.7%, South-East Queensland up to 3.7%, and South Australia up to 3.2%. In 2025, Energy Consumers Australia reported that 29% of households across the country described paying their energy bills as “quite difficult” in the past six months. Victoria sits firmly within that trend, showing that bill stress is a daily reality for many families, not just a headline number. But what’s actually driving these hikes?
1. Network Upgrades and Maintenance
Distribution companies must maintain ageing poles, wires, and substations—and harden them for safety. Those costs flow through network tariffs, which form a big slice of your bill. The ESC’s 2025–26 cost stack shows network charges rising while some environmental components fell. The net effect still pushes the total up slightly.
2. Wholesale Market Conditions
Retailers hedge and buy electricity on wholesale markets. Prices fluctuate with plant outages, demand spikes, and changes in contract prices. The ESC notes wholesale futures ticked higher between the draft and final decisions, contributing to a small increase in the wholesale component for 2025–26.
3. Transition Investments and Reliability
Victoria is shifting the grid toward renewables and new transmission. In the short term, building and integrating new assets adds costs. Over time, efficiencies and fuel-free generation can lower exposure to volatile fossil fuel prices, but the interim period isn’t cost-free. The ESC’s final documents show methodology updates around solar exports and cost allocation—evidence of a grid in transition.
4. Demand Patterns and Extreme Weather
Hot summers and cold snaps drive peak loads. When everyone heats or cools at once, the system strains and costs climb. Australian government guidance also highlights how heating and cooling choices heavily impact household energy use—each degree of extra heating or cooling can lift energy use by 5–10%. That sensitivity matters on peak days.
5. Retail Operations and Compliance
Retailers incur operating costs and must meet consumer protections and billing standards. Those obligations are crucial, but they’re not free. The ESC’s framework balances these realities against consumer fairness.
Grid economics rarely make for thrilling reading. Yet they explain the bill in your hand.
Who Will Be Most Affected by the Price Increases? Last winter in Ballarat, a renter told us she’d started timing showers because the bill kept creeping up. That feeling is familiar.
Low-income households and concession holders：Energy expenses eat a bigger share of income here, so even a $20 annual shift on the benchmark matters. Relief programs help, but timing and eligibility vary.
Renters and apartment dwellers：Many can’t add rooftop solar, upgrade insulation, or replace old appliances. Usage patterns are hard to change when you don’t control the building shell.
Small businesses：Local cafes, bakeries, and retail shops run equipment all day. Rising electricity costs eat into thin profit margins. The VDO small-business benchmark rose about $90 on average, with bigger increases in some zones. Margin pressure is real when food and wages also rise.
Regional customers：Long feeder lines and lower population density increase distribution costs. Your zone matters. If you’re in an area with higher network charges, you may feel the increases more.
What Can You Do to Manage Rising Energy Costs? Most families underestimate how much control they have. You have more levers than you think.
6. Compare Plans and Switch If It’s Cheaper
Use Victorian Energy Compare, the state’s independent comparison tool. It checks every generally available plan. Government material shows shoppers using it in 2024 saved around $240 on average by switching. It’s one of the simplest ways to reduce power bill — worth five minutes and a bill upload.
7. Claim Government Rebates in 2025–26
Two pieces of relief are current:
$150 Energy Bill Relief Fund (Commonwealth, 2025–26 H1): Most Victorian households and eligible small businesses receive $75 credits in Q1 and Q2 of 2025–26, applied automatically by retailers. Embedded-network customers can apply via Victorian Energy Compare within set windows.
$100 Power Saving Bonus (Victoria, from 25 Aug 2025): One-off payment for eligible concession-card households. Apply by visiting Victorian Energy Compare and checking your best offer; community support is available if you need help.
If someone tells you the $250 bonus is still open to all households, that’s out of date. The current rules differ.
8. Tackle the Big Loads First: Heating, Cooling, and Hot Water
Heating and cooling are the elephant in the room. Government guidance says they can account for about 40% of home energy use. Two degrees on the thermostat is a big lever. Each degree of heating or cooling adds 5–10% to energy use. Aim for 18–20°C in winter, 25–27°C in summer, and seal drafts. Service filters. Close doors. Small routines, big impact. They help you save electricity every single day.
9. Upgrade Appliances When They’re Due
If the fridge roars like it’s from the 90s, it’s probably sipping more than you think. Look for high star-ratings and consider moving to efficient electric systems over time. Sustainability Victoria and Energy.gov.au have detailed guidance and programs to support upgrades, including the Victorian Energy Upgrades program.
10. Combine Solar, Timing, and Storage—Practically
Solar helps if your roof and budget allow. Shift usage to daylight where possible. If you can’t install solar—say you’re renting—consider flexible backup options that improve resilience during outages—another way to buffer against Victorian energy prices increase.
This is where a portable power station can be practical. It’s not a silver bullet, but it’s useful for blackouts, work-from-home continuity, and targeted peak-shaving for small loads. At EcoFlow, we often help households pick capacity based on their essential circuits and outage patterns.
If you want a larger, home-friendly unit, EcoFlow DELTA Pro 3 Portable Power Station is an example with 4–12 kWh expandable capacity, fast UPS switchover, and solar integration. Some households use it to keep fridges, lights, and internet running through evening peaks or storms. Use cases vary, so size to your loads.
EcoFlow DELTA Pro 3 Portable Power Station
We’ve seen families in outer-metro areas keep the fridge cold and the Wi-Fi on during feeder faults. Milk stays chilled. Kids stop hunting for torches.
11. Use Independent Tools as a Routine
Set a reminder to compare plans every six to twelve months. The Victorian Energy Compare tool is independent and doesn’t sell plans. It’s there to keep retailers honest and show you the math, not the marketing.
Conclusion
The Victorian energy price increase for 2025 is modest on paper, but households feel every dollar. Start with the VDO facts, then pull the levers you control: compare plans, claim eligible relief, adjust heating, and plan smart backup where it fits. The grid is changing. Your habits can change faster.
FAQs
Who is the cheapest electricity supplier in Victoria?
There’s no single cheapest retailer for everyone. Prices vary by usage, meter type, and location. The Victorian Energy Compare website is the best tool to find tailored deals. It lists every generally available plan and shows your estimated annual cost. Government guidance positions it as the trusted first stop; users who switched in 2024 reported about $240 average savings. Recheck at least once a year, or when your usage changes.
How do I claim my $250 energy rebate in Victoria?
That $250 Power Saving Bonus program isn’t open to all households in 2025. Instead, two different supports apply now. First, the Energy Bill Relief Fund credits $150 automatically across the first two quarters of 2025–26 for most households; embedded-network customers apply via Victorian Energy Compare. Second, from 25 August 2025, a bonus of $100 is offered to eligible concession-card households through the government site. Check your eligibility and application steps on official government pages to avoid confusion with past programs.
How much is the average electricity bill in Victoria?
For an average household in Victoria, the annual electricity bill typically ranges between $1,500 and $2,000. The amount depends on household size, appliance efficiency, and whether you live in metropolitan or regional areas. With the 2025 electricity price increase Victoria households could see an extra $100–$150 added to this average. Those on higher usage or default offers may pay even more, making comparison shopping essential.