Price Factors, Tariffs and 2026 Rules
How electricity and gas bills are priced in Australia (2026–27 guide)
Supply charges, usage rates, tariff types, the DMO and VDO reference prices and gas pricing explained, with the 2026–27 changes and links to every detailed guide.
A household electricity bill in Australia is mostly two things added together: a daily supply charge you pay regardless of use, and usage charges for each kilowatt hour (kWh) you consume, sometimes split by time of day. Solar exports earn a feed-in credit, and some plans add a demand charge or a cheaper controlled load rate. Gas bills work the same way but measure energy in megajoules (MJ). What you pay for each part depends on your retailer's plan, your distribution network and, in New South Wales, South East Queensland, South Australia and Victoria, an official price cap that also serves as the reference price every advertised offer must be compared against. For 2026–27 those caps (the DMO and VDO) took effect on 1 July 2026. This guide maps the whole system and links to a detailed guide on each piece.
The parts of an electricity bill
| Bill line | What it is | Unit | Can you change it? |
|---|---|---|---|
| Daily supply charge | Fixed cost of being connected | cents per day | Only by choosing a plan with a lower one |
| Usage (flat) | One rate for all kWh | cents per kWh | Use less or choose a lower rate |
| Peak / shoulder / off-peak | Time-of-use rates | cents per kWh | Shift use to cheaper periods |
| Demand charge | Based on your highest kW in a set window | cents per kW per day or month | Avoid running big loads together in the window |
| Controlled load | Separate circuit, often hot water | cents per kWh | Usually fixed to that appliance |
| Solar feed-in | Credit for exported kWh | cents per kWh | Retailer-set; compare plans |
| Concessions and credits | State concessions, rebates, one-off credits | dollars | Apply through retailer or state agency |
All residential prices on a bill and in plan documents include GST. Your bill should also show your NMI (National Meter Identifier), which the comparison sites use to pull your actual usage history.
Who sets which part of the price
The final price is a stack of costs. Roughly speaking:
- Network costs cover the poles, wires and meters run by your distribution business (for example Ausgrid, Endeavour Energy and Essential Energy in NSW, Energex in South East Queensland, SA Power Networks in South Australia, and five distributors in Victoria). The Australian Energy Regulator (AER) or, for some matters, state bodies approve these charges.
- Wholesale costs reflect what retailers pay for electricity in the National Electricity Market.
- Environmental scheme costs such as the federal Renewable Energy Target and state schemes.
- Retail costs and margin, which is where retailers compete.
The retailer packages all of this into a plan. That is why the same household can see quite different supply charges and usage rates from one retailer to another, even on the same street.
Price caps and reference prices: DMO and VDO
Two official benchmarks shape plan prices in most of the east coast:
- The Default Market Offer (DMO), set each year by the AER, caps the price of standing offers (default contracts) in NSW, South East Queensland and South Australia. See the DMO 2026–27 guide.
- The Victorian Default Offer (VDO), set by the Essential Services Commission (ESC), does the same for Victoria. See the VDO 2026–27 guide.
Both are also the reference price. Retailers must show how each market offer compares with it as a percentage, such as "8% less than the reference price". Our reference price guide explains how to read those statements and what they leave out.
Other regions work differently. In regional Queensland, the Queensland Competition Authority sets regulated prices. In Tasmania, the ACT, Western Australia and the Northern Territory, regulated or government-set prices apply to some or all households, and retail competition varies. Check your state's regulator if you live outside the DMO and VDO regions.
Tariff structures: when you use power matters
A plan's tariff structure decides how usage is charged:
- Flat or single rate: one price per kWh at any time.
- Time-of-use: higher rates in the evening peak (often around 4–9 pm), lower rates overnight and, increasingly, in the middle of the day when solar output is high.
- Demand: a charge based on your highest power draw in a window, plus usage rates.
- Controlled load: a separate meter or circuit for hot water or similar, supplied at set times at a lower rate.
Read the time-of-use and demand tariff guide and the controlled load guide for how each is billed, and test your own pattern with the flat versus time-of-use worked example.
Solar exports and free midday power
If you have rooftop solar, the feed-in tariff credits each kWh you send to the grid. Feed-in rates are set by retailers and have fallen as midday solar has grown; Victoria stopped setting a minimum feed-in tariff from 1 July 2025. See solar feed-in tariffs in 2026.
The newest change is free midday electricity. From 1 July 2026, retailers in DMO regions must offer the opt-in Solar Sharer Offer, with three free hours each day for smart-meter households, and Victoria's Midday Power Saver began on 1 October 2026. These are explained in the Solar Sharer and Midday Power Saver guide.
How gas is priced
Gas bills have a daily supply charge and usage charges in MJ, often in blocks or steps where the rate changes after a set amount of use in the billing period. Your meter measures volume, so the bill converts it to energy using a heating value and a pressure correction factor shown on the bill.
There is no DMO or VDO for gas, so gas offers are not compared against a regulated reference price. You can still compare gas plans on Energy Made Easy and Victorian Energy Compare. If you are weighing up going all-electric, the biggest single bill effect is often removing the gas supply charge altogether; see the gas versus all-electric bill example.
A quick worked estimate
Illustrative example only (not current prices): a household on a flat-rate plan uses 1,000 kWh in a 90-day quarter. Usage rate 32 c/kWh; supply charge 110 c a day.
- Usage: 1,000 × $0.32 = $320
- Supply: 90 × $1.10 = $99
- Total before credits: $419
If the household exports 400 kWh of solar at a 4 c/kWh feed-in tariff, it earns 400 × $0.04 = $16, bringing the bill to $403. Run your own figures in the quarterly bill estimator.
What to do next
- Find your last bill and note the supply charge, usage rates, tariff type and NMI.
- Follow the step-by-step plan comparison.
- If something on your bill looks wrong, see where to get help with bill problems.
FAQ
Why is my supply charge so different from my neighbour's?
Supply charges vary by retailer, plan and network area. Two homes on the same network can pay different daily charges because their retailers price plans differently; some plans have a low supply charge and higher usage rates, or the reverse.
Does the DMO cap every electricity plan?
No. The DMO caps standing offer prices in NSW, South East Queensland and South Australia. Market offers are not capped, but they must state how they compare with the DMO reference price. The VDO plays the same role in Victoria.
Is gas price-capped?
Not through the DMO or VDO. Gas plans are set by retailers and compared on the government comparison sites.
Are the prices on my bill GST-inclusive?
Residential plan prices shown in plan documents and on bills generally include GST. Check the bill's notes if unsure.
Sources
- Australian Energy Regulator — DMO decisions, network approvals and retail rules
- Energy Made Easy — official comparison site for NSW, Qld, SA, Tas and ACT
- Essential Services Commission — Victorian Default Offer and retail rules
- Victorian Energy Compare — official Victorian comparison site
- Queensland Competition Authority — regulated prices in regional Queensland
