Australian households and small businesses will see their electricity bills fluctuate from July 1, 2026, following the release of the final Default Market Offer (DMO) by the Australian Energy Regulator (AER) and the Victorian Default Offer (VDO) by the Essential Services Commission Victoria (ESCV) this week. The determinations, announced on May 9, 2026, cement the reference prices for standing offer contracts across New South Wales, South East Queensland, South Australia, and Victoria for the 2026-27 financial year.
The final decisions reveal a mixed bag for consumers, with some facing increases of up to $80 annually while others could see their bills drop by as much as $120 per year. These changes reflect a complex interplay of wholesale energy costs, network charges, and retail margins across different state markets.
“The final DMO and VDO decisions provide a crucial benchmark for consumers, ensuring that standing offer prices remain fair and reflective of underlying costs,” an AER spokesperson stated on May 9, 2026.
State-by-State Impact for Residential Customers
New South Wales
Customers in NSW will experience varied increases depending on their distribution zone. Those in the Ausgrid network can expect an average annual increase of approximately $50, representing a 2.5% rise in their standing offer. Endeavour Energy network users will see an average $40 increase (2.0%), while Essential Energy customers face the highest hike at around $60 per year (3.0%). These adjustments apply to both residential and small business standing offers.
South East Queensland
In contrast to NSW, residential customers in South East Queensland are set to receive a modest reduction. The final DMO confirms an average annual decrease of around $20, translating to a 1.0% drop in standing offer prices. This relief is largely attributed to stabilising wholesale energy prices in the region. Small businesses in SE QLD will also benefit from a 2.0% decrease.
South Australia
South Australia continues to grapple with higher energy costs, with residential standing offers increasing by approximately $80 annually, a 4.0% rise. This makes SA the state with the highest DMO increase in this determination. Small businesses in SA will also see a slight increase of 0.5%.
Victoria
Victorian households are positioned for the most significant relief. The ESCV’s final VDO determination mandates an average annual reduction of approximately $120 for residential customers on standing offers, equating to a 6.5% decrease. Small businesses in Victoria will also see substantial savings, with an 8.0% reduction in their VDO. This positive outcome for Victorians is a result of lower wholesale energy costs and a competitive retail market.
What the DMO and VDO Mean for You
The Default Market Offer and Victorian Default Offer serve as a safety net, capping the prices that retailers can charge customers on standing offer contracts. These are typically customers who have not actively sought out a market offer or whose fixed-term contracts have expired. While the DMO and VDO provide a reference point, most Australians can achieve better rates by comparing and switching to competitive market offers.
Energy retailers are now required to update their pricing in line with these new determinations, effective July 1, 2026. Consumers are strongly encouraged to review their current energy plans and compare them against the new reference prices to ensure they are on the most cost-effective tariff. Understanding your bill components, including tariffs and charges, is essential for identifying potential savings. Decipher Your 2026 Australian Electricity Bill: Tariffs, Charges & Save $200
The Role of Wholesale Prices and Network Costs
The AER and ESCV determinations consider various factors, including the wholesale cost of electricity, network charges (for transmitting and distributing electricity), environmental scheme costs, and retail operating costs. The recent stabilisation of wholesale electricity prices in some regions, particularly Victoria and South East Queensland, has been a key driver for the reductions seen in those states. Conversely, persistent network costs and other market factors have contributed to the increases observed in NSW and SA.
As Australia heads into the cooler months, managing energy consumption becomes even more critical. With federal energy rebates concluding, households will need to rely more on efficient practices and smart energy choices to mitigate rising costs. Strategies such as optimising heating systems and improving home energy efficiency are paramount. How to Cut Your Electricity Bill This Winter in Australia 2026: Strategies After Federal Rebates End
| State/Region | Residential Standing Offer Change (Annual) | Percentage Change | Small Business Standing Offer Change (Annual) |
|---|---|---|---|
| NSW (Ausgrid) | Up approx. $50 | +2.5% | Up approx. $50 |
| NSW (Endeavour) | Up approx. $40 | +2.0% | Up approx. $40 |
| NSW (Essential) | Up approx. $60 | +3.0% | Up approx. $60 |
| SE Queensland | Down approx. $20 | -1.0% | Down approx. $20 |
| South Australia | Up approx. $80 | +4.0% | Up approx. $10 |
| Victoria | Down approx. $120 | -6.5% | Down approx. $150 |
Note: Small business changes are indicative based on typical consumption and may vary.
This latest round of DMO and VDO decisions underscores the dynamic nature of Australia’s energy market. While some relief is on the horizon for certain regions, others will need to be proactive in managing their energy usage and exploring competitive offers to avoid bill shock come July. Comparing plans from various retailers remains the most effective way for consumers to secure the best available prices. Centrelink Energy Rebates Australia 2026: Your Guide to Expanded Eligibility & Automatic Bill Relief