Australian households and small businesses are receiving clearer signals on their electricity costs for the 2026-27 financial year, with the Australian Energy Regulator (AER) approving network pricing proposals for several states and releasing a consolidated report on 24 April 2026. This follows earlier draft determinations from the AER for the Default Market Offer (DMO) in New South Wales, South East Queensland, and South Australia, and the Essential Services Commission (ESC) for Victoria’s Default Offer (VDO), all pointing towards potential reductions for many consumers.
The most recent development saw the AER on 22 April 2026 officially approve SA Power Networks’ pricing proposal for the period spanning 1 July 2026 to 30 June 2027. This approval, part of a broader consolidated stakeholder report released by the AER on April 24, outlines price changes for ACT, NSW, NT, QLD, SA, and TAS. For South Australian residential customers on the Default Market Offer, this could translate to a decrease of approximately 1.3%, or around $31 annually, based on the AER’s draft DMO determination.
AER’s DMO 2026-27: Draft Cuts for NSW, QLD, SA
On 19 March 2026, the AER released its draft determination for DMO 8, which sets the maximum electricity prices for customers on standing offers in New South Wales, South East Queensland, and South Australia. The draft decision proposed significant reductions, largely driven by lower wholesale electricity costs and decreased environmental and retail operating expenses.
“This draft decision points to the potential for some welcome relief for households and small businesses after several years of rising energy costs following Russia’s invasion of Ukraine,” AER Chair Clare Savage stated.
The consultation period for the DMO 8 draft closed on 9 April 2026, with the AER receiving 20 written submissions. The final DMO decision is anticipated by 26 May 2026, with new prices taking effect from 1 July 2026.
Key proposed annual price changes for residential and small business customers under the draft DMO 8 included:
| Region | Customer Type | Proposed Annual Change (Draft) | Indicative AUD Saving (Draft) |
|---|---|---|---|
| New South Wales | Residential | -2.4% to -8.2% | -$58 to -$226 |
| Small Business | -7.6% to -21.2% | -$379 to -$1,320 | |
| SE Queensland | Residential | -10.1% | -$216 |
| Small Business | -12.8% | -$550 | |
| South Australia | Residential | -1.3% | -$31 |
| Small Business | -15.2% | -$845 |
These figures are based on typical consumption levels and vary by distribution zone.
Victorian Default Offer 2026-27: Modest Reductions Proposed
In Victoria, the Essential Services Commission (ESC) released its draft decision for the 2026-27 Victorian Default Offer (VDO) on 12 March 2026. The draft proposes an average reduction of three per cent (approximately $46 annually) for domestic customers and five per cent (around $172 annually) for small business customers across the state’s five distribution zones.
The proposed VDO changes are primarily driven by lower environmental costs, particularly reduced certificate prices. The ESC also plans to transition residential customers from a two-period to a new three-period time-of-use tariff structure. The consultation period for the VDO draft closed on 10 April 2026, and the ESC’s final decision is expected by 24 May 2026.
Regional Queensland Also Set for Price Drops
Regional Queensland customers are also in line for potential bill relief, with the Queensland Competition Authority (QCA) releasing its draft determination on regulated retail electricity prices for 2026-27 on 27 March 2026. The QCA’s draft forecasts a 9.7% decrease (approximately $212) for typical residential customers on flat-rate tariff 11, and an 11.3% decrease (around $296) for typical small business customers on flat-rate tariff 20.
This regional price drop is largely influenced by the AER’s draft DMOs for South East Queensland, which cap notified prices under the Queensland Government’s uniform tariff policy. The QCA’s draft also proposes a regional solar feed-in tariff of 6.153 cents per kilowatt-hour for 2026-27, a 29% decrease from the previous year, reflecting reduced energy costs and a lower value of solar export during the day. Submissions on the QCA’s draft were due by 1 May 2026, with the final determination expected in late May or early June 2026.
What Drives These Price Shifts?
The overarching theme across these regulatory determinations is a general easing of wholesale electricity costs, which comprise a significant portion of energy bills. Factors contributing to this include reduced spot market volatility and increased generation from wind and battery storage. Additionally, lower environmental scheme costs and more efficient retail operating costs are playing a role.
However, the AER has noted that the wholesale cost calculations in its draft DMO were made prior to the recent escalation of conflict in the Middle East. While forward wholesale electricity contracts for 2026-27 have seen increases since then, they remain below last year’s levels and significantly lower than those observed during the 2022 energy market events. The AER will continue to monitor these developments before making its final determination.
New Solar Sharer Offer for Smart Meter Users
An interesting addition within the AER’s DMO 8 draft is the introduction of a Solar Sharer Offer (SSO). This opt-in tariff structure is designed for smart meter users and features a daily three-hour free electricity window, typically in the middle of the day. The aim is to incentivise customers to shift their energy consumption, such as for electric vehicle charging or running appliances, to periods of high solar generation, thereby optimising grid use.
While cost-neutral for typical users compared to standard time-of-use tariffs, the SSO encourages demand response and better alignment with renewable energy supply. This signals a move towards more dynamic pricing structures that reward consumers for intelligent energy use. For those considering solar and battery systems, understanding these new tariff structures will be crucial for maximising savings. More information on financing these systems can be found in our guide: Best Solar Panel & Home Battery Financing Options in Australia 2026: Loans, PPAs & Green Mortgages Explained.
What This Means for Your Bill
While the approved and draft price reductions offer some relief, it is essential for Australian energy consumers to remain proactive. The default offers serve as a safety net and a benchmark, but market offers from retailers often provide more competitive rates. Households and small businesses should use these regulatory updates as an impetus to compare electricity plans and ensure they are on the best deal for their usage patterns.
Even with potential reductions, managing energy consumption remains key to controlling costs. Exploring energy-efficient upgrades, such as heat pump hot water systems, can lead to further savings. Our guide Are Heat Pump Hot Water Systems Worth It in Australia 2026? A Guide to Costs, Savings & State Rebates provides valuable insights. For those preparing for winter, understanding how to minimise heating bills is also vital: Winter is Coming: How to Slash Your Australian Heating Bills in 2026 as Energy Rebates End.
The final determinations from the AER and ESC in May, and the QCA in late May/early June, will provide the definitive figures for the 2026-27 financial year. Consumers are encouraged to monitor these announcements and engage with their retailers to secure the most advantageous energy plan.