Default Market Offer: The Electricity Price Safety Net

The AER is required by competition and consumer regulations to determine the Default Market Offer (DMO) each year for New South Wales (customers served by the Ausgrid, Endeavour Energy, Essential Energy networks), South East Queensland (Energex) and South Australia (SA Power Networks). It has been operating since 2019.

The DMO is a regulated electricity price set by the AER in May each year and applies from 1 July to 30 June of the following year.

Determining the DMO price each year is one of the ways the Australian Energy Regulator works to ensure energy consumers are better off now, and in the future.

The DMO:

• protects consumers from unjustifiably high electricity prices
• is a fair, trusted and reasonably priced safety net price for consumers who haven’t shopped around
• is the maximum price a retailer can charge customers on standard retail plans, and when advertising other offers, they must compare it to the DMO price
• acts as a comparison price to market offers and retailers must show how these plans compare to the DMO when advertising these offers
• is set each year and takes into account a range of factors and is adjusted according to market conditions.
• is not a “best offer” price and it may not be the best offer in an area.

If you are concerned about the price you’re paying for electricity, there may be a better offer out there. That’s where www.energymadeeasy.gov.au can help.

What are the different types of electricity offers and how does the DMO price apply to them?

Standing offers: the default offered to customers when they don’t sign up to a market offer. It may not be the best offer in an area, but the maximum price charged is determined by the DMO price, which once set on 1 July won’t change for the next 12 months. Around 9% of customers are on these plans.

Market offers: often contain discounts or other offers. The price is set by the retailer, and it can change at any time. When advertising these offers the retailer must compare their offers to the DMO price so you can see how good their deal is. Around 91% of customers are on these plans.

Who does the DMO price apply to?

The DMO applies to residential and small businesses customers. Under the new regulations, the DMO is expanded to small customers on standing offers across a range of defined tariffs.

The DMO tariff cap applies to residential customers on standing offers with:

• flat rate tariffs, where the rates are the same regardless of the time of day
• time of use tariffs (also called flexible tariffs), where the rates are different depending on the time of day (such as peak evening rates) and,
• controlled load tariffs.

The DMO tariff cap for regulated tariffs applies to small business customers on standing offers with:

• flat rate tariffs, where the rates are the same regardless of the time of day, and
• time of use tariffs (also called flexible tariffs), where the rates are different depending on the time of day (such as peak evening rates).

The DMO annual comparison price for non-regulated tariffs applies to residential and small business customers on a standing offers not listed above.

In DMO regions, around 8.3% of households and around 16.4% of small businesses are on standing offers.

How does the DMO price provide a reference point for comparison?

When energy retailers advertise their market retail plans they have to show how that plan compares to the DMO price.

This allows consumers to compare plans and see how good electricity deals actually are.

How does the AER set the DMO price?

When setting the DMO price each year the AER must have regard to the objective of providing customers on standing offers with a fair, trusted and reasonably priced electricity option that reflects the costs of supplying customers with an essential service. The AER must also consider:

• the efficient costs of supplying electricity in the distribution region to customers on standing offers
• the types of customers on standing offers to whom electricity is supplied in the distribution region
• the long-term interest of consumers
• any other matters it considers relevant.

The AER must also have regard to the various costs retailers face in supplying electricity to customers. These are:

• the cost to buy electricity from the wholesale market (wholesale electricity costs)
• the cost to transport electricity to customers through the network (network costs)
• the cost to comply with government environment schemes (environmental costs)
• the efficient costs to serve customers and modest costs to acquire and retain customers (retail costs and retail margin).

What can I do to get a better deal on energy?

1. Know your plan: take out your latest energy bill to get a feel for the basic information.
2. Contact your retailer and ask theme these questions:

• What kind of contract am I on and when does it expire?
• Are my prices going up? If so, when and by how much?
• Do you have a better deal for me?

1. Consider looking for a better energy plan *

• When comparing plans on www.energymadeeasy.gov.au have a copy of your bill handy. Before switching, ask your new retailer the same questions before signing up.

* The comparison information on Energy Made Easy reflects energy plans that are currently on offer. New DMO prices will come into effect on 1 July 2026 which may see plans change. Energy retailers will then have 2 days to update their new plans into the system.

Where can I find more on the DMO determination for 2026/2027?

Keep up to date with the latest information about the latest DMO determination: Default market offer 2026–27 | Australian Energy Regulator (AER)