Australian households and small businesses in New South Wales, South East Queensland, and South Australia could see significant changes to their electricity bills for the 2027-28 financial year, following the Australian Energy Regulator (AER)‘s release of draft Default Market Offer (DMO) guidelines this week. Published on September 18, 2026, these draft guidelines open a critical consultation period for stakeholders, with submissions closing on October 16, 2026. The final guidelines are expected by December 1, 2026, and will inform the AER’s annual DMO price determination for the upcoming financial year.
What is the Default Market Offer (DMO)?
The DMO acts as a safety net, setting the maximum price electricity retailers can charge residential and small business customers who are on standing offer contracts, or those who have not actively chosen a market offer. It also serves as a crucial comparison price, allowing consumers to assess the value of various market offers in NSW, SE QLD, and SA.
“The DMO objective is to provide small customers that are supplied with electricity at standing offer prices with a fair, trusted and reasonably priced electricity option that reflects the costs of supplying small customers with an essential service.”
The framework for the DMO was subject to a review by the Australian Government in late 2025, with amendments to the DMO Regulations published in March 2026. These reforms aimed to strengthen the DMO’s effectiveness, particularly as a safeguard for disengaged customers, and introduced an additional requirement for the AER to develop and maintain DMO guidelines.
Key Aspects of the Draft Guidelines
The newly released draft guidelines outline the AER’s intended approach to determining the DMO for 2027-28. This includes how the regulator will consider various cost components, market conditions, and consumer protections. The guidelines are designed to enhance transparency and improve regulatory certainty in the annual DMO process.
For households, the DMO directly influences the maximum price they pay if they haven’t switched to a competitive market offer. For example, previous DMO determinations have seen average annual bills for residential customers vary significantly by network zone and usage. While the DMO is a safety net, market offers typically provide better value, with analysis in Victoria finding median domestic market offers to be around 10% lower than prevailing VDO prices.
Impact on Your Bills
While the current consultation focuses on the methodology for setting future DMO prices, the outcomes will directly translate into the electricity rates applied from July 1, 2027. This means that the feedback received during this consultation period will play a role in shaping the cost of electricity for millions of Australians.
Energy consumers on standing offers, particularly those in NSW, South East Queensland, and South Australia, should pay close attention to the development of these guidelines. Understanding the factors that influence the DMO can empower consumers to make more informed decisions about their energy plans. For those seeking immediate relief, it is always recommended to compare market offers from various retailers, as these often provide more competitive rates than the regulated standing offers.
Why This Matters Now
The AER’s Strategic Plan 2026–2030, released on August 21, 2026, underscores the DMO’s role as one of the most direct consumer protection tools. The guidelines will streamline the annual DMO consultation process, ensuring focus on issues relevant to each determination and fostering active engagement with stakeholders to minimise regulatory burden.
This consultation is a direct opportunity for industry participants, consumer advocacy groups, and other interested parties to provide input on how electricity prices are regulated. The AER explicitly invites written submissions on the draft DMO guidelines by October 16, 2026.
For households concerned about managing their energy costs, understanding the DMO and actively comparing market offers is crucial. Further information on available support can be found in our comprehensive guide: Australia’s Energy Bill Relief Landscape in 2026: A Comprehensive Guide to State and Federal Support. Additionally, investing in technologies like home energy management systems can help mitigate the impact of fluctuating retail prices. Read more here: Best Home Energy Management Systems in Australia 2026: Slash Bills by $1,000+ Annually.
Future DMO Protections
The Australian Government also intends to extend DMO protections to small customers in embedded networks from the 2027–28 DMO, marking a further expansion of consumer safeguards. The timing and nature of this consultation will depend on the finalisation of amendments relating to embedded networks.
Consultation Details
| Action | Date | Affected Regions |
|---|---|---|
| Draft DMO Guidelines Published | September 18, 2026 | NSW, SE QLD, SA |
| Consultation Closes | October 16, 2026 | NSW, SE QLD, SA |
| Final DMO Guidelines Published | By December 1, 2026 | NSW, SE QLD, SA |
| 2027-28 DMO Takes Effect | July 1, 2027 | NSW, SE QLD, SA |
The AER’s proactive step in publishing these draft guidelines allows for robust feedback from all sectors, ultimately aiming to ensure fair and reasonable electricity prices for disengaged customers across the National Electricity Market regions it covers. Consumers are encouraged to review the draft guidelines and consider making a submission to influence the future of their electricity bills.