Australian households and small businesses in New South Wales, South East Queensland, and Victoria are set to see reductions in their electricity bills from 1 July 2026, following final determinations by the Australian Energy Regulator (AER) and Victoria’s Essential Services Commission (ESC). While most regions will experience savings, South Australian residential customers on flat rate tariffs face a slight increase. These decisions, released on 25 and 26 May 2026, establish the Default Market Offer (DMO) and Victorian Default Offer (VDO) for the coming financial year, impacting customers on standing offers and setting a crucial benchmark for competitive market plans.
East Coast Households See Significant Drops
New South Wales residential customers on flat rate standing offers can expect a reduction of between 3.4% and 5.0%, translating to annual savings of approximately AUD$66 to AUD$137. For those with smart meters on time-of-use tariffs, savings range from 3.7% to 7.7%, or AUD$72 to AUD$211 annually. Small businesses in NSW will benefit from even larger cuts, with reductions between 9.0% and 20.9%.
South East Queensland customers will experience some of the most substantial relief. Residential flat rate standing offers will decrease by 7.2%, saving around AUD$155 per year. Households on time-of-use tariffs will see the largest residential reduction nationally, with a 10.7% decrease, equating to annual savings of approximately AUD$229. Small businesses in the region are also set for significant reductions, ranging from 10.4% to 14.0%.
Victoria’s Essential Services Commission confirmed an average 5% drop in the Victorian Default Offer (VDO) for residential customers, saving them an average of AUD$84 annually. Small businesses in Victoria will see an average 6% reduction, saving around AUD$241 per year. These reductions vary across the state’s five distribution zones, with AusNet customers seeing the largest residential saving of AUD$160 (an 8% decrease).
Regional Queensland (Ergon Energy network), which operates outside the DMO framework, will also see price reductions from 1 July 2026. The Queensland Competition Authority (QCA) announced that typical households on Tariff 11 will save approximately AUD$151 (a 6.9% decrease), while small businesses on Tariff 20 will save around AUD$212 (an 8.1% decrease).
South Australia: A Mixed Outcome
South Australia stands as an exception to the widespread reductions. Residential customers on flat rate standing offers in SA will see a modest increase of 1.4%, adding approximately AUD$33 to their annual bills. However, residential customers on time-of-use tariffs will experience a small decrease of 1.1%, saving around AUD$25 annually. Small businesses in South Australia will benefit from price cuts ranging from 6.8% to 12.1%.
South Australian Energy Minister Tom Koutsantonis attributed the residential flat rate increase to the state’s high transmission costs and extensive transmission line infrastructure.
“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,” said AER Chair Clare Savage. “The reductions compared to last year reflect easing cost pressures in parts of the electricity supply chain and addresses industry and consumer feedback to ensure prices remain fair and workable in practice.”
Driving Forces Behind the Price Changes
The primary driver behind these price adjustments is a notable easing of wholesale electricity costs across the National Electricity Market (NEM). This downward pressure is largely attributed to increased renewable energy generation, particularly from wind and grid-scale battery storage. Batteries, in particular, have played a crucial role by displacing more expensive gas and hydro generation during evening peak demand periods, leading to flatter prices throughout the day and reduced spot market volatility.
Falling environmental scheme costs and a moderation in retailer operating costs have also contributed to the overall reductions.
The New Solar Sharer Offer
As part of the DMO reforms, a new Solar Sharer Offer (SSO) will be introduced from 1 July 2026. This innovative opt-in plan will provide eligible households with smart meters in DMO regions (NSW, SA, and South East Queensland) three hours of free electricity daily during the midday solar peak. Crucially, this offer is available even to homes without rooftop solar panels, allowing more Australians to benefit from abundant daytime solar generation by shifting their energy usage.
This initiative aligns with broader efforts to leverage demand-side management and optimise grid efficiency. Exploring options like Smart Home Energy Systems: Slash Your 2026 Australian Electricity Bills by Up To 30% could further amplify these savings by automating energy use during free periods.
What This Means for Your Bill
It is important to note that the DMO and VDO primarily act as a regulated ‘safety net’ for customers on standing offers. While these customers will see automatic price adjustments from 1 July 2026, they represent a minority of households (e.g., around 7-17% in DMO/VDO regions).
For the majority of Australians on market offers, the DMO and VDO serve as a reference price, compelling retailers to remain competitive. Energy Australia, AGL, and Red Energy have already indicated that their rates will change from 1 July, with existing customers being notified in mid-June.
Comparing current electricity plans against these new benchmarks is crucial to ensure you are on the best available deal. General information on managing energy costs and available support can be found in guides such as Navigating Australia’s Energy Bill Relief and Support in 2026: A Comprehensive Guide.
Price Changes at a Glance: Residential Standing Offers (July 1, 2026)
| State/Region | Distribution Zone | Flat Rate Change (%) | Annual Saving/Increase (AUD$) | Time-of-Use Change (%) | Annual Saving/Increase (AUD$) |
|---|---|---|---|---|---|
| New South Wales | Ausgrid | -3.4% | -$66 | -3.7% to -7.7% | -$72 to -$211 |
| Endeavour Energy | -3.4% | -$83 | -3.7% to -7.7% | -$72 to -$211 | |
| Essential Energy | -5.0% | -$137 | -5.0% | -$137 | |
| South East QLD | Energex | -7.2% | -$155 | -10.7% | -$229 |
| South Australia | SA Power Networks | +1.4% | +$33 | -1.1% | -$25 |
| Victoria | Average (VDO) | -5.0% | -$84 | Varies by network | Varies by network |
| AusNet | -8.0% | -$160 | - | - | |
| CitiPower | -4.0% | -$65 | - | - | |
| Jemena | -4.0% | -$75 | - | - | |
| Powercor | -4.0% | -$70 | - | - | |
| United Energy | -3.0% | -$50 | - | - | |
| Regional QLD | Ergon Energy (Tariff 11) | -6.9% | -$151 | - | - |
Source: AER Final DMO 2026-27, ESC Final VDO 2026-27, QCA Final Determination 2026-27. Figures are for typical residential usage and may vary based on individual consumption and tariff structures.
Industry Outlook
The Australian Energy Market Operator (AEMO) also recently highlighted the “unexpectedly huge deployment of batteries” over the past year, both at household and industrial scales, as fundamentally changing the grid dynamics and contributing to increased energy resilience. This trend, coupled with renewables meeting over 50% of generation in late 2025, is a key factor in the current price reductions. Further insights into battery systems can be found in Unlock $3,700+ in Rebates: Your 2026 Guide to Australian Home Battery Systems.
As the energy market continues its transition, consumers are encouraged to actively engage with their energy providers and compare offers to maximise potential savings.