Australian households and small businesses in New South Wales, South East Queensland, and South Australia are on the cusp of a significant announcement that could reshape their electricity bills from July 1, 2026. The Australian Energy Regulator (AER) is scheduled to release its final determination for the Default Market Offer (DMO) 2026-27 by May 26, 2026, following a draft proposal in March that indicated potential price reductions.
This imminent decision follows the AER’s draft determination, released on March 19, 2026, which proposed average electricity price reductions across all regulated regions. The proposed decreases are primarily driven by a sustained decline in wholesale electricity costs, alongside reduced environmental and retail operating costs. If the final determination largely mirrors the draft, many consumers could see some relief after several years of rising energy expenses.
What the Draft DMO 2026-27 Proposed
The AER’s draft DMO 2026-27 outlined a welcome shift in electricity pricing, suggesting potential annual bill reductions for both residential and small business customers. These changes reflect a period of easing cost pressures within the electricity supply chain.
“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,” AER Chair Clare Savage said in March. “The reductions reflect easing costs across parts of the electricity supply chain, particularly wholesale energy where we’ve seen falling electricity contract prices, reduced spot price volatility, and increased output from wind and battery generation.”
For residential customers, the draft decision indicated annual price decreases ranging from 1.3% to 10.1%, depending on the distribution zone. Small businesses were projected to see even larger reductions, between 7.6% and 21.2%. These figures, if maintained in the final determination, represent tangible savings for a significant portion of the Australian energy market.
Here’s a breakdown of the proposed average annual bill changes for domestic flat tariff customers, based on the draft determination (assuming typical annual usage of 4,000 kWh without a controlled load):
| State/Region | Distributor | Proposed Change (AUD) | Proposed Change (%) |
|---|---|---|---|
| New South Wales | Ausgrid | -$90 | -4.6% |
| Endeavour Energy | -$64 | -2.7% | |
| Essential Energy | -$226 | -8.2% | |
| South East QLD | Energex | -$216 | -10.1% |
| South Australia | SA Power Networks | -$31 | -1.3% |
Source: AER Draft DMO 2026-27, March 19, 2026. Figures are illustrative and subject to change in the final determination.
Small businesses were set to be the biggest winners, with nominal price falls of around 10-15 per cent and up to 21.2 per cent in some parts of NSW.
Why the Changes?
The AER attributes the proposed changes to price reductions across most factors influencing the DMO, including wholesale electricity, environmental scheme costs, and retail operating costs. Recent government reforms mean the DMO is now calculated using only efficient costs, including the lowest network tariffs available to retailers.
What is the Default Market Offer?
The DMO is a safety net set by the AER, capping the maximum price electricity retailers can charge residential and small business customers on standing offer contracts in NSW, South East Queensland, and South Australia. It also serves as a crucial reference price, against which retailers must compare their market offers in advertising.
It’s important to note that the DMO is a maximum price, and typically, more competitive market offers are available. Consumers are strongly encouraged to shop around and compare plans to ensure they are on the best deal. Understanding the components of your bill and different tariff structures can help you save. Decipher Your 2026 Australian Electricity Bill: Tariffs, Charges & Save $200
What This Means for Consumers
While the prospect of lower electricity bills is positive, it is important for consumers to remain proactive. The AER’s final decision by May 26 will lock in these prices for 12 months from July 1, 2026. Even with potential reductions to standing offers, market offers from retailers often provide better value.
Customers who have not switched electricity providers in a while, or who are currently on a standing offer, should use the upcoming DMO announcement as a trigger to review their current plan. Utilising comparison websites like Energy Made Easy can help identify more competitive deals.
Furthermore, exploring energy-efficient home upgrades can provide long-term savings, regardless of DMO fluctuations. Australia’s Top Energy-Efficient Home Upgrades 2026: Maximise ROI as Electricity Bills Soar This Winter
For Victorian customers, the Essential Services Commission (ESC) sets a separate Victorian Default Offer (VDO), which is also typically announced around this time of year.
This winter, as federal energy rebates conclude, proactive strategies to manage electricity consumption will be crucial. How to Cut Your Electricity Bill This Winter in Australia 2026: Strategies After Federal Rebates End
Stay tuned to Daily Energy News for the AER’s final DMO determination later this month, which will provide definitive figures for electricity price changes across New South Wales, South East Queensland, and South Australia.