Australian households and small businesses across the National Electricity Market (NEM) could see a reprieve in their electricity bills from July 1, 2026, following recent draft determinations from the Australian Energy Regulator (AER) and the Queensland Competition Authority (QCA). These draft decisions, released in March 2026, signal significant price reductions for customers on Default Market Offer (DMO) and regulated standing offers, primarily driven by a substantial drop in wholesale electricity costs.
The Australian Energy Regulator’s draft Default Market Offer (DMO) 2026-27, announced on March 19, 2026, proposes lower electricity prices for residential and small business customers in New South Wales, South East Queensland, and South Australia. Similarly, the Queensland Competition Authority (QCA) released its draft determination on March 27, 2026, forecasting price decreases for customers in regional Queensland.
Wholesale Prices Drive Downward Pressure on Bills
The primary catalyst for these anticipated reductions is a significant moderation in wholesale electricity prices. The Australian Energy Market Operator’s (AEMO) Quarterly Energy Dynamics (QED) report for Q1 2026, released on April 29, 2026, revealed that the average wholesale electricity price across the NEM fell by 12% year-on-year, settling at $73 per megawatt-hour (MWh). This decline is largely attributed to increased renewable generation, which constituted a record 46.5% of the NEM’s total generation in the first quarter, alongside the strategic deployment of grid-scale and household batteries.
“The reductions reflect easing costs across parts of the electricity supply chain, particularly wholesale energy where we’ve seen falling electricity contract prices, reduced spot price volatility, and increased output from wind and battery generation.” — AER Chair Clare Savage
While the NEM-wide trend is positive, AEMO’s report also noted regional variations. Victoria experienced the steepest fall in wholesale prices (down 28% to $43/MWh), while South Australia was the only NEM region to record a year-on-year increase (up 33% to $88/MWh), primarily due to a single weather-related volatility event in January.
What the Draft Determinations Mean for Your Bill
The AER’s draft DMO for 2026-27 proposes the following annual price changes, which would take effect from July 1, 2026, pending the final determination due by May 26, 2026.
| Region | Customer Type | Proposed Decrease (Percentage) | Estimated Annual Saving (AUD) |
|---|---|---|---|
| New South Wales | Residential | 2.4% to 8.2% | $58 to $226 |
| Small Business | 7.6% to 21.2% | $379 to $1,320 | |
| South East Queensland | Residential | 10.1% | $216 |
| Small Business | 12.8% | $550 | |
| South Australia | Residential | 1.3% | $31 |
| Small Business | 15.2% | $845 |
For regional Queensland, the QCA’s draft determination forecasts similar relief:
| Region | Customer Type | Proposed Decrease (Percentage) | Estimated Annual Saving (AUD) |
|---|---|---|---|
| Regional Queensland | Residential | 9.7% | $212 (approx.) |
| Small Business | 11.3% | N/A |
These proposed reductions follow several years of rising energy costs, offering what AER Chair Clare Savage described as “welcome relief” for consumers.
The New Solar Sharer Offer: Harnessing Midday Sun
Included in the DMO reforms is the introduction of the Solar Sharer Offer (SSO), a new opt-in tariff designed to incentivise consumers to utilise abundant midday solar energy. This innovative offer will provide three hours of free electricity usage during the middle of the day for households with smart meters in DMO regions (NSW, SA, SE QLD), even if they do not have solar panels installed.
The SSO aims to help households reduce their power bills by shifting energy use to the free-power period, simultaneously supporting a more reliable and efficient electricity grid by absorbing excess solar generation. This will be available from July 1, 2026.
What Happens Next and How to Prepare
The AER’s draft DMO 2026-27 was open for public consultation, which closed on April 9, 2026. The regulator is now considering stakeholder feedback and updated market data before releasing its final decision by May 26, 2026. The new DMO and regulated prices will then take effect from July 1, 2026.
While these draft determinations point to potential savings, it’s crucial for Australians to remain proactive in managing their energy costs. The universal federal energy bill relief measures, which offered up to $150 to eligible households and small businesses, concluded on December 31, 2025. This means many Australians are already facing higher net bills in the current quarter, despite the positive wholesale price trends.
Consumers should actively compare market offers, as the DMO and regulated prices serve as a safety net and reference point, not necessarily the cheapest available options. Engaging with competitive market offers can often lead to further savings. For strategies on managing your energy consumption and finding better deals, consider reviewing guides such as How to Cut Your Electricity Bill This Winter in Australia 2026: Strategies After Federal Rebates End and Australia’s Top Energy-Efficient Home Upgrades 2026: Maximise ROI as Electricity Bills Soar This Winter.
The introduction of the Solar Sharer Offer also highlights the growing importance of smart energy management. Households with smart meters, or those considering them, could significantly benefit by shifting appliance usage to the midday period. This also underscores the value of solar energy, even for those without panels, and the broader grid benefits of renewable integration. For those considering their own solar installation, understanding the landscape is key. You can find more information in our guide on How to Choose a Solar Installer in Australia 2026: Accreditation, Warranties & Avoiding Scams.