Among the states in Australia, Victoria offers one of the most competitive energy prices. In 2009, the state deregulated electricity and gas retail prices. This allows providers to set their prices. As a result, energy retailers compete to gain consumers through their pricing. For Victorians, this leaves them with a lot of options to choose from.
The Victorian Default Offer (VDO) also ensures residents aren’t paying too much for their energy usage. The VDO is a cap on how households can be charged for electricity.
The chances of saving money on energy prices in Victoria are high. But, which is the cheapest that suits your needs? In this post, we will list the energy retailers that offer the cheapest electricity prices.
Energy distributors in Victoria
Energy distributors are the ones who connect your home to electricity power lines and gas pipelines. Five energy distributors in Victoria serve specific areas across the state:
- AusNet Services: Outer northern and eastern suburbs and eastern Victoria
- Citipower: Melbourne City and inner suburbs
- Jemena: Northern and north-western suburbs
- Powercor Australia: Western Victoria and western suburbs
- United Energy: Mornington Peninsula and southern suburbs
How energy is charged in Victoria
There are two main costs that Victorians have to pay for electricity:
- Supply charge: This is the distributor’s transmission charge and the price for power generation.
- Usage charge: This is applied for each kilowatt per hour (kWh) of household electricity.
Tariffs can also influence the price of your energy bill. Single-rate tariffs, also known as peak or flat rate, is the most common in the state. It charges the same rate regardless of the time of day. There are also block rate tariffs that charge electricity in different block rates.
For example, you will be charged a specific rate for the first portion of energy you use daily. When you exceed the first portion, you will be charged the second block rate, which could be higher or lower than the first block.
Time-of-use (TOU) tariff works like flexible pricing. That means the rates vary on when you consume electricity. TOU doesn’t include a shoulder period between peak and off-peak times in Victoria. The flexible pricing tariff is a variation of TOU, which applies a different usage rate at different times of the day. However, households must have a smart meter that can be read remotely to use this tariff.
Controlled load or two-rate tariffs are when your energy retailer charges a rate for particular applicants in your home separately from the rest of your property. It is usually used for electric hot water systems or underfloor heating that run during off-peak periods or overnight.
Demand tariffs are similar to flexible pricing tariffs because they require smart meters. It charges based on the amount of electricity you use instead of your energy usage over time.
Victorians with solar panels are eligible for a feed-in tariff (FiT), which is a credit on the bill for the energy the panels produce and send back to the grid. The flat rate minimum in the 2023-24 period is 4.9 per kWh.
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Cheapest electricity providers in VIC
Now that you know how energy is charged in the state, let’s explore the cheapest electricity providers in VIC:
| Energy Retailer | Plan | Annual Cost |
| 1st Energy | 1st Super Saver, Residential — Anytime | $1,130 |
| Simple Energy | VIC Simple for Good | $1,170 |
| Tango Energy | eSelect | $1,180 |
| OVO Energy | The One Plan Welcome Credit | $1,185 |
| CovaU Energy | Super Saver Online Residential Single (C1R) | $1,200 |
| Alinta Energy | HomeDeal – Single Rate | $1,220 |
| AGL | Residential Value Saver | $1,250 |
| GloBird Energy | GloBird Combo GREENLIGHT Residential (Flat Rate Without Controlled Load) – Citipower | $1,260 |
| Kogan Energy | Kogan Energy with free Kogan First | $1,270 |
| Origin Energy | Origin Home Assist Variable (Single Rate) | $1,280 |
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Negotiating with energy providers
Negotiating with energy providers can effectively secure better rates and lower your overall electricity costs. One of the things you can do is to understand billing terms and conditions. This includes knowing the details of your current pricing plan, any additional fees or charges, and the terms of your contract.
Another thing to do is to seek discounts or special offers. These include discounts for signing up for paperless billing, bundling services, or paying your bills on time. Some providers may offer promotional rates for new customers or seasonal discounts.
There are various incentives to try in the state. For example, AGL has the AGL Rewards, where customers can benefit from discounts at multiple retailers. Other energy providers offer a credit on the first bill when you sign up online, ranging from $50 to $100.
In case the negotiations with your current electricity provider are unsuccessful, exploring other options by switching providers may be a good idea. Research and compare pricing plans of different providers.
Victoria stands out among the other states’ competitive energy market, offering consumers various options and opportunities to save on electricity costs. The deregulation of electricity and gas retail prices paves the way for increased provider competition, benefiting consumers through competitive pricing. The VDO safeguards against overcharging, ensuring residents aren’t paying excessive amounts for their energy usage.
With five distinct energy distributors serving specific regions and a variety of tariff options available, Victorians have the flexibility to tailor their energy plans to suit their individual needs.
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