The Victorian Government has announced it has successfully bargained with the energy provider of the Wonthaggi desalination plant for lower energy  costs than initially proposed.

The State Government secured $13 million a year in water savings over the next 27 years after negotiating with operator SP AusNet.

Savings have also been made for customers by securing insurance at lower cost than originally forecasted.

These are modest savings in the context of a contract that has a total estimated cost between $18-$24 billion depending on the volume of water ordered each year over the 27 year contract.