Millions of Australian Households and Businesses on Track for Power Bill Relief
CANBERRA – After years of relentless pressure on household budgets, millions of Australians in New South Wales, Victoria, South East Queensland, and South Australia are poised for a welcome reduction in their electricity bills from 1 July 2026.
Draft pricing decisions released by Australia’s energy regulators forecast the most significant electricity price reductions since the global energy crisis began. The proposed cuts are outlined in the Australian Energy Regulator’s (AER) Draft Default Market Offer (DMO) and the Essential Services Commission’s (ESC) Draft Victorian Default Offer (VDO), which set the maximum price retailers can charge customers on standing offers.
These offers also serve as a crucial reference price that all retailers must use when advertising their deals, making it easier for consumers to compare offers and find a better price.
Why Are Prices Tipped to Fall?
The primary drivers behind the proposed price drops are a fall in wholesale electricity costs and lower costs associated with environmental schemes.
AER Chair Clare Savage noted that the reductions reflect an easing across the electricity supply chain. “We’ve seen falling electricity contract prices, reduced spot price volatility, and increased output from wind and battery generation,” Ms Savage said.
This is welcome news for energy customers who have faced significant price hikes in recent years. The final determinations from the regulators are expected in May 2026, with the new, lower prices set to take effect on 1 July 2026.
“This draft decision points to the potential for some welcome relief for households and small businesses after several years of rising energy costs following Russia’s invasion of Ukraine.” - Clare Savage, AER Chair.
State-by-State Breakdown of Proposed Changes
The draft determinations outline specific price changes for each regulated region, impacting both residential and small business customers on standing offers.
New South Wales Residential customers in NSW could see annual bill reductions between 2.4% (-$58) and 8.2% (-$226), depending on their distribution zone. Small businesses are in line for even larger savings, with proposed decreases ranging from 7.6% (-$379) to 21.2% (-$1,320).
South East Queensland Households in the Energex network in SE Queensland are set for the largest drop, with the AER proposing a 10.1% decrease, which could save an average residential customer around $216 per year. Small businesses in the region could see bills fall by 12.8% (-$550).
South Australia In South Australia, the proposed reduction is more modest. Residential customers can expect a 1.3% fall in their annual bill, equating to a saving of around $31. Small businesses, however, are slated for a significant 15.2% price cut, potentially saving $845 annually.
Victoria Under the ESC’s draft decision for the Victorian Default Offer, the average domestic customer could see their annual bill decrease by about $46, a reduction of around 3%. Small business customers in Victoria are projected to save an average of $172 per year. The VDO price drop is primarily attributed to lower costs associated with environmental compliance certificates.
What This Means for Your Energy Plan
The DMO and VDO act as a safety net for customers who don’t or can’t engage with the retail market. While customers on these standing offers will directly benefit from the proposed cuts, the changes have a market-wide impact.
Because all retailers must use the DMO/VDO as a comparison point, a lower reference price generally increases competitive pressure, which can flow through to better market offers for all customers. Experts advise that if you are on a standing offer, you are almost certainly paying more than you need to and should actively shop around.
The consultation period for the draft decisions closes this week, with the AER and ESC considering stakeholder feedback before locking in the final prices in May.