CANBERRA – Millions of Australian households and small businesses in New South Wales, South East Queensland, South Australia, and regional Queensland are poised for potential electricity bill relief from July 1, 2026. This comes after the Australian Energy Regulator (AER) and the Queensland Competition Authority (QCA) released their draft price determinations in March and early April, signalling the most significant proposed reductions since the onset of the global energy crisis.
The draft decisions, which set the maximum prices retailers can charge customers on standing offers (known as the Default Market Offer, or DMO, and regulated retail prices in regional Queensland), also serve as a crucial reference for comparing market offers. While these are currently draft proposals, the final determinations are anticipated in May 2026, with new prices taking effect from the start of the new financial year.
Why Are Prices Expected to Fall?
The primary drivers behind these proposed price drops are a reduction in wholesale electricity costs and lower expenses associated with environmental schemes. AER Chair Clare Savage noted that the draft decisions reflect an easing across the electricity supply chain.
“We’ve seen falling electricity contract prices, reduced spot price volatility, and increased output from wind and battery generation.” — Clare Savage, AER Chair
This news arrives as a welcome development for consumers who have endured substantial price hikes in recent years. For context, the cessation of the federal government’s Energy Bill Relief Fund on December 31, 2025, contributed to a 37% surge in out-of-pocket electricity costs for many households in the year to February 2026, according to the Australian Bureau of Statistics.
State-by-State Breakdown of Proposed Reductions
New South Wales (NSW): Residential customers on standing offers in NSW could see annual bill reductions ranging from 2.4% (approximately -$58) to 8.2% (approximately -$226), depending on their distribution zone (Ausgrid, Endeavour Energy, or Essential Energy). Small businesses are slated for even larger savings, with proposed decreases from 7.6% (approximately -$379) to a significant 21.2% (approximately -$1,320).
South East Queensland (SE QLD): Households on the Energex network in SE Queensland are set for the largest residential drop under the DMO, with the AER proposing a 10.1% decrease, potentially saving an average residential customer around $216 per year. Small businesses in the region could see their bills fall by 12.8% (approximately -$550).
It’s important to note that Queensland has recently experienced some of the fastest-rising electricity bills. Data from April 2026 indicated that average annual costs in Queensland hit $1,980, marking a 9.2% increase from 2025. This makes any proposed relief particularly significant for the state.
Regional Queensland: For residential customers outside of South East Queensland, the QCA’s draft determination forecasts a 9.7% fall in regulated retail electricity prices. Small businesses in these regional areas could see an 11.3% reduction.
South Australia (SA): South Australian residential customers on standing offers are looking at a more modest 1.3% fall in their annual bill, equating to a saving of around $31. However, small businesses in SA are projected for a substantial 15.2% price cut, potentially saving $845 annually.
Here’s a summary of the draft residential DMO changes for 2026-27:
| State/Region | Distributor | Current Average Annual Bill | Draft Average Annual Bill | Proposed Change (AUD) | Proposed Change (%) |
|---|---|---|---|---|---|
| NSW | Ausgrid | $1,965 | $1,875 | -$90 | -4.6% |
| Endeavour Energy | $2,411 | $2,347 | -$64 | -2.7% | |
| Essential Energy | $2,741 | $2,515 | -$226 | -8.2% | |
| South East QLD | Energex | $2,143 | $1,927 | -$216 | -10.1% |
| Regional QLD | (Regulated Price) | N/A | N/A | N/A | -9.7% |
| SA | SA Power Networks | $2,301 | $2,270 | -$31 | -1.3% |
Note: Current and Draft Average Annual Bill figures for Regional QLD are not directly comparable to DMO figures as they are QCA regulated prices. Percentages are based on domestic flat tariffs for a residential property without a controlled load. Source: AER Draft DMO 2026-27, QCA Draft Determination 2026-27.
What This Means for Consumers
These draft determinations, if finalised, represent a crucial shift towards more affordable energy for many Australians. However, consumers are encouraged to actively engage with the market. The DMO acts as a safety net, but competitive market offers from retailers often provide even better value. Resources like Draught-Proofing vs. a New Heater vs. Solar Panels: Best ROI for Cutting Your Australian Winter Energy Bills in 2026 can help households identify further savings.
Beyond the DMO, other initiatives are also being rolled out. In Victoria, the ‘Midday Power Saver’ offer, set to launch on October 1, 2026, will provide three hours of free power daily, potentially saving families up to $300 annually (or over $1,000 with solar and batteries). Similarly, the AER’s DMO reforms include a ‘Solar Sharer Offer’ for NSW, SA, and SE QLD, providing three hours of free power during the day to smart meter households, even without solar panels.
As winter approaches, understanding your energy consumption and exploring available options is vital. For those concerned about gas bills, our guide Australia’s 2026 Winter Gas Squeeze: How to Prepare Your Home and Avoid Bill Shock offers practical advice.
The final decisions from the AER and QCA are expected in late May 2026, and Daily Energy News will provide comprehensive updates as they are released.