Australian households and small businesses in New South Wales, South East Queensland, and South Australia are facing varied electricity price changes from July 1, 2026, following the Australian Energy Regulator’s (AER) final Default Market Offer (DMO) determination for the 2026-27 financial year. While most residential and all small business customers are set to see their electricity bills decrease, South Australian households on flat rate tariffs will experience a modest increase. The AER announced its final decision on May 26, 2026, with the new prices taking effect from the start of the new financial year.
The DMO acts as a crucial safety net for customers on standing offer contracts, who have not actively chosen a market offer from a retailer. It also serves as a reference price, against which all retailers must compare their market offers in advertising, helping consumers assess value.
“This is a positive outcome with prices coming down for the majority of households and all small businesses across the three regions where the DMO safety net applies,” stated AER Chair Clare Savage.
State-by-State Residential Impact
For residential customers on a flat rate standing offer, the changes are as follows:
- New South Wales: Households will see decreases ranging from 3.4% (approximately AUD$66 annually) to 5.0% (approximately AUD$137 annually), depending on their distribution zone (Ausgrid, Endeavour Energy, or Essential Energy).
- South East Queensland: Residential customers are set for a 7.2% reduction, equating to an annual saving of around AUD$155.
- South Australia: Households on flat rate tariffs will face a 1.4% increase, adding approximately AUD$33 annually to their bills.
For those with smart meters on a time-of-use (ToU) standing offer, the picture is generally more favourable:
- New South Wales: Reductions range between 3.7% (AUD$72) and 7.7% (AUD$211).
- South East Queensland: Customers will benefit from a 10.7% decrease, saving around AUD$229 annually.
- South Australia: ToU customers will experience a 1.1% decrease, translating to an annual saving of approximately AUD$25.
“Electricity prices will fall for most households and small businesses on the Default Market Offer (DMO) from 1 July, with the AER today releasing its final prices for 2026-27.”
Small Business Savings
Small businesses across all three DMO regions are set to receive reductions. For those on flat rate tariffs, annual benchmark prices will decrease between 6.8% (AUD$379) and 11.3% (AUD$705). Small businesses on time-of-use tariffs will see even more significant drops, ranging from 12.1% (AUD$673) to 20.9% (AUD$1,303), depending on their state and network.
| State / Network | Residential Flat Rate Change | Residential ToU Change | Small Business Flat Rate Change | Small Business ToU Change |
|---|---|---|---|---|
| NSW (Ausgrid) | -3.4% (AUD$66) | -3.7% (AUD$72) | -9.0% (AUD$432) | -9.4% (AUD$449) |
| NSW (Endeavour) | -3.4% (AUD$83) | -5.0% (AUD$137) | -9.0% (AUD$432) | -12.4% (AUD$772) |
| NSW (Essential) | -5.0% (AUD$137) | -7.7% (AUD$211) | -11.3% (AUD$705) | -20.9% (AUD$1,303) |
| SE QLD (Energex) | -7.2% (AUD$155) | -10.7% (AUD$229) | -10.4% (AUD$445) | -14.0% (AUD$601) |
| SA (SA Power Net.) | +1.4% (AUD$33) | -1.1% (AUD$25) | -6.8% (AUD$379) | -12.1% (AUD$673) |
*Figures represent average annual changes. Source: AER DMO 2026-27 Final Determination, May 2026.
Why the Price Adjustments?
The AER’s determination reflects a complex interplay of factors influencing electricity costs. A significant driver for the overall price reductions in most regions is the easing of wholesale electricity costs. This has been attributed to increased generation from wind and battery storage, which has reduced the reliance on more expensive gas and hydro power during peak periods. Lower electricity futures prices and reduced spot market volatility have also contributed.
While network costs, which account for a substantial portion (39-54%) of typical DMO costs, have generally increased in some areas, these rises have largely been offset by the decline in wholesale energy prices, as well as reduced retailer operating costs and environmental scheme costs.
Introducing the Solar Sharer Offer
In a notable new development, the AER’s DMO for 2026-27 also introduces the Solar Sharer Offer (SSO). This is a new opt-in electricity plan available to customers with smart meters in DMO regions from July 1, 2026. The SSO provides three hours of free electricity during the middle of the day. The aim is to help households leverage abundant solar generation and potentially reduce their bills by shifting energy use to these periods, while also supporting a more efficient grid. The SSO’s price will be regulated, offering a safeguard to consumers.
What This Means for Your Bill
While the DMO sets the maximum price for standing offers, it is important to remember that it is often not the cheapest plan available in the market. The AER and state energy ministers consistently encourage consumers to shop around and compare market offers from different retailers.
Retailers are mandated to inform customers at least once every 100 days if they could be on a better plan. With the new DMO prices taking effect, now is an opportune time to review your current energy plan and compare it against other available market offers to ensure you are getting the best deal for your household or business. Tools like the AER’s Energy Made Easy website can assist in this comparison.
For those struggling with energy costs, various government support schemes and relief packages may also be available. Understanding your options and actively engaging with your energy provider can lead to significant savings. For more information on available support, refer to our comprehensive guide: Navigating Australia’s Energy Bill Relief and Support in 2026: A Comprehensive Guide.
Even with these DMO changes, focusing on energy efficiency remains a key strategy for bill reduction. Exploring options for home insulation or smart home energy systems can further reduce consumption, regardless of your retail plan. Slash Your Winter 2026 Electricity Bill by $500+: Post-Rebate Strategies for Australian Homeowners.