Price Factors, Tariffs and 2026 Rules
Default Market Offer (DMO) 2026–27: what changed on 1 July 2026
The AER's DMO 8 for 2026–27 explained — regions covered, how prices moved in NSW, South East Queensland and South Australia, what the cap applies to and how to use it.
The Default Market Offer (DMO) is the maximum annual price a retailer can charge a household or small business on a standing offer in New South Wales, South East Queensland and South Australia, and it is the reference price that every market offer in those regions must be compared against. The AER released its final determination for 2026–27 (DMO 8) on 26 May 2026, and the new prices apply from 1 July 2026 to 30 June 2027. For residential customers on a flat-rate standing offer, the cap fell by about 3.4% to 5.0% across the NSW distribution zones and by about 7.2% in South East Queensland, and rose by about 1.4% in South Australia. The cap is a ceiling for default plans, not a guide to what you will pay on a market offer, so the useful step is to compare your plan with it.
Where the DMO applies
The DMO covers the three regions of the National Energy Market where it was introduced under the Competition and Consumer (Industry Code—Electricity Retail) Regulations 2019:
| Region | Distribution zones |
|---|---|
| New South Wales | Ausgrid, Endeavour Energy, Essential Energy |
| South East Queensland | Energex |
| South Australia | SA Power Networks |
It does not apply in Victoria (which has the VDO), regional Queensland (Ergon Energy network area, where the Queensland Competition Authority sets regulated prices), Tasmania, the ACT, Western Australia or the Northern Territory.
How prices moved for 2026–27
Changes reported in the final determination, compared with 2025–26 (sourced from the AER's DMO 2026–27 final determination as reported on its release; check the AER document for each zone's exact figure):
| Customer and tariff | NSW | South East Qld | South Australia |
|---|---|---|---|
| Residential, flat rate standing offer | down 3.4% to 5.0% | down 7.2% | up 1.4% |
| Residential, time-of-use (smart meter) | down 3.7% to 7.7% | down up to 10.7% | down 1.1% |
| Small business | down 9.0% to 20.9% | down 10.4% to 14.0% | down 6.8% to 12.1% |
The AER builds the DMO from estimated wholesale, network, environmental and retail costs plus a retail margin. Network charges and wholesale costs differ by zone, which is why the change is not the same everywhere.
Annual residential DMO prices for 2026–27 at the AER's reference usage for each zone (without controlled load), as reported from the final determination:
| Distribution zone | Flat rate 2025–26 | Flat rate 2026–27 | Time-of-use 2026–27 |
|---|---|---|---|
| Ausgrid (NSW) | $1,965 | $1,899 (−$66) | $1,893 |
| Endeavour Energy (NSW) | $2,411 | $2,328 (−$83) | $2,320 |
| Essential Energy (NSW) | $2,741 | $2,604 (−$137) | $2,530 |
| Energex (South East Qld) | $2,143 | $1,988 (−$155) | $1,914 |
| SA Power Networks (SA) | $2,301 | $2,334 (+$33) | $2,276 |
The time-of-use percentage changes in the table above compare the new time-of-use price with last year's flat-rate price. The annual usage assumed for each zone and tariff type, and the controlled load and small business amounts, are set out in the AER's final determination; confirm the figure for your zone and tariff on the AER website before you use the reference price checker.
What the DMO caps (and what it does not)
The DMO is an annual price, not a per-kWh cap. A retailer can set its standing offer supply charge and usage rates however it likes, as long as the annual bill for a customer with the assumed usage does not exceed the DMO.
It applies to:
- Residential standing offers on flat, time-of-use and controlled load tariffs
- Small business standing offers on flat or time-of-use tariffs
- Other standing offers through an annual comparison price
It does not:
- Cap market offers (most households are on these)
- Guarantee your bill stays below a set amount if you use more than the assumed usage
- Apply to gas
From 1 July 2026, the AER also regulates the price of the new Solar Sharer Offer using the time-of-use DMO in each zone; see Solar Sharer and Midday Power Saver.
The DMO as a reference price
Retailers must state each market offer's price as a percentage above or below the DMO for the relevant zone and tariff, at the reference usage. This lets you compare advertisements on a common basis. Rules include:
- The comparison must be shown in advertising and plan information.
- Conditional discounts cannot be advertised as larger than the unconditional reference comparison.
- The percentage is calculated at the assumed annual usage, not yours.
Read reference price percentages explained for how to turn that percentage into dollars and when it can mislead.
Worked example: is your standing offer near the cap?
Illustrative example only, using made-up figures. Suppose the DMO for your zone's flat-rate tariff is $2,000 a year and your standing offer has a supply charge of 120 c a day and a usage rate of 38 c/kWh, and the assumed usage is 4,000 kWh.
- Supply: 365 × $1.20 = $438
- Usage: 4,000 × $0.38 = $1,520
- Annual price at the reference usage: $1,958, which sits just under the cap.
A market offer stated as "15% less than the reference price" would cost about $2,000 × 0.85 = $1,700 at the same usage, roughly $258 less. If your own usage is 6,000 kWh, the gap could be larger or smaller depending on how the offer's supply charge and usage rate are balanced, which is why you should run your own usage on Energy Made Easy.
Who should act on the DMO change
- Standing offer customers: you probably got the price change automatically from 1 July 2026. Check whether a market offer would cost less.
- Market offer customers: your retailer may have changed your prices around 1 July too. Compare your plan's reference percentage with current offers.
- Smart meter households: compare time-of-use and Solar Sharer options alongside flat rates.
FAQ
When does the DMO change each year?
The AER publishes a draft early in the year and a final determination in May. New prices apply from 1 July for 12 months.
Will my bill fall by the same percentage?
Not necessarily. The percentage applies to the standing offer cap at the reference usage. Your bill depends on your plan, your retailer's price changes and your consumption.
Does the DMO apply to embedded networks?
Embedded network arrangements (some apartment blocks, retirement villages and caravan parks) have their own rules. Ask the embedded network operator or the AER.
Is there a DMO for gas?
No. Gas plans are compared on Energy Made Easy without a regulated reference price.
Sources
- Australian Energy Regulator — Default market offer 2026–27 final determination (May 2026)
- Energy Made Easy — explainer on the DMO and plan comparisons
- Federal Register of Legislation — Competition and Consumer (Industry Code—Electricity Retail) Regulations 2019
- Australian Competition and Consumer Commission — enforcement of the electricity retail code
