From 1 July 2019, Victorian energy retailers are required to have a Victorian Default Offer (VDO) for homes and small business customers on a specific rate type. These rate types will move to Victorian Default Offer rates from 1 July 2019;

- Residential electricity customers - Flat and controlled load rates

- Business electricity customers (use less than 40MWH per year) - Flat rate

The Victorian Default Offer is a regulated price for electricity that will replace Standing Offer tariffs advertised by Victorian energy retailers. The Victorian Default Offer price is set annually for each electricity distribution zone based on average customers.

The price of electricity under the Victorian Default Offer is set by Victorian Regulator, the Essential Services Commission, and is not set by energy companies. Most customers on a standard contract (or standing offer) will now receive the Victorian Default Offer. Electricity retailers may continue to offer customers contracts that differ from the Victorian Default Offer, through market offers.

The Victorian Government introduced the Victorian Default Offer to make it easier for residential and business customers to compare electricity plans across different retailers.

From 1 January 2020, the Essential Services Commission determined the tariffs that your electricity retailer charges you if you are on the Victorian Default Offer. The price determination covers all types of standing offers, including those based on time-of-use, demand, and flexible tariff structures – broadening the Victorian Default Offer to provide a safeguard for all standing offer customers.

Controlled load electricity refers to electricity being used by a stand-alone item, like an electric hot water service, electric slab heating and irrigation pumps. Controlled loads are recorded by a separate meter and can be billed as an off-peak rate.

It’s a tariff where you’re charged the same rate for electricity throughout the day and night. There is no distinction made between peak and off-peak periods like time of use tariffs.

A flat-rate tariff is usually lower than peak but higher than off-peak and shoulder rates.

What is a time of use tariff?

With time of use tariffs, different usage rates are charged for the electricity you use at different times. The time periods are;

- Off peak charged when the electricity network has low usage, such as overnight.

- Shoulder a usage rate that sits between peak and controlled load times. Shoulder rates are usually a bit cheaper than peak rates and are available in most states. For example, shoulder times are 7.00 am to 3.00 pm and 9.00 pm to 10.00 pm on weekdays, as well as 7.00 am to 10.00 pm on weekends. These times may differ between states.

- Peak charged when the electricity network has high usage, such as in the evening or on weekdays.