Australian households and small businesses are on the cusp of receiving clearer insights into their electricity costs for the upcoming financial year, with the Australian Energy Regulator (AER) and Victoria’s Essential Services Commission (ESC) set to release their final Default Market Offer (DMO) and Victorian Default Offer (VDO) determinations by late May 2026. These critical decisions, expected by May 26th for the AER and May 24th for the ESC, will confirm the safety-net electricity prices that take effect from 1 July 2026.
Draft proposals, released earlier this year, indicated significant reductions for many consumers across New South Wales, South East Queensland, South Australia, and Victoria. These potential savings, driven largely by easing wholesale electricity costs and a drop in environmental charges, offer a glimmer of relief after several years of escalating energy bills. For some small businesses in New South Wales, the draft figures suggested annual savings could reach up to $1,320.
AER’s Default Market Offer: Potential Savings Across NSW, SE QLD, and SA
The AER’s draft DMO determination for 2026-27, initially published on 19 March 2026, proposed reductions in prices across all regulated regions it covers: New South Wales, South East Queensland, and South Australia. These cuts were primarily attributed to lower wholesale electricity costs, alongside reduced environmental and retail operating costs.
Under the draft decision, residential customers in New South Wales could see annual price decreases ranging from 2.4% (approximately -$58) to 8.2% (approximately -$226), depending on their distribution zone. South East Queensland residential customers were projected to benefit from a 10.1% (approximately -$216) reduction. For small businesses, the proposed savings were even more substantial, with New South Wales businesses potentially seeing drops of 7.6% (around -$379) to a significant 21.2% (up to -$1,320). Small businesses in South East Queensland were forecast to receive a 12.8% (around -$550) decrease.
“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,” said AER Chair Clare Savage when the draft DMO was released on 19 March 2026.
The AER is currently finalising its determination, taking into account stakeholder feedback and updated market data. The final decision is anticipated by 26 May 2026, with new prices effective from 1 July 2026.
Victoria’s Default Offer: Households and Small Businesses to See Reductions
In Victoria, the Essential Services Commission (ESC) released its draft Victorian Default Offer (VDO) on 12 March 2026, proposing average annual bill reductions across the state’s five electricity networks. The ESC’s final VDO decision is expected by 24 May 2026.
For an average Victorian household, the draft VDO suggested a decrease of approximately $46 (around 3%) annually. Small businesses were projected to save an average of $172 (around 5%) per year. The primary driver behind these proposed reductions was a significant drop in environmental costs, which are expenses retailers incur to support state and federal renewable energy programs.
While the draft offers a promising outlook, the ESC has noted that the final determination could still result in a different outcome. Approximately 17% of Victorian households and 21% of small businesses are currently on the VDO, which also serves as a reference price for comparing competitive market offers.
Regional Queensland’s Regulated Prices Also Set to Fall
Customers in regional Queensland, whose electricity prices are regulated by the Queensland Competition Authority (QCA), are also set to benefit from significant reductions. The QCA’s draft determination, published on 27 March 2026, forecast price drops for the 2026-27 financial year.
Regional households on Tariff 11 could see their annual bills decrease by 9.7%, equating to approximately $212 to $232 less per year, based on median usage. Small businesses in regional Queensland were projected for an 11.3% decrease. These reductions are largely attributed to falling wholesale electricity costs.
The QCA’s final determination is expected in late May or early June 2026, with the new regulated prices to apply from 1 July 2026.
The Solar Sharer Offer: A New Pathway to Savings
Adding another dimension to the DMO reforms is the introduction of the Solar Sharer Offer (SSO). This new opt-in electricity plan, set to be available from 1 July 2026, will provide households with smart meters in DMO regions (New South Wales, South East Queensland, and South Australia) with three hours of free electricity usage during the middle of the day.
The proposed free usage periods are 11 am to 2 pm in New South Wales and South East Queensland, and 12 pm to 3 pm in South Australia. This initiative aims to help households cut power bills by shifting energy use to periods of abundant solar generation and to support grid stability by soaking up excess energy. It will be available to both homeowners and renters, even those without solar panels.
What This Means for Your Energy Bill
The impending final determinations from the AER and ESC, along with the QCA, signal a period of potential relief for many Australian energy consumers. While the draft decisions offer a promising outlook, the ultimate impact on individual bills will depend on actual usage patterns and whether customers are on standing offers or market contracts.
It is crucial for consumers to be proactive. Even with potential reductions to default offers, competitive market offers often provide better value. We encourage all Australians to How to Compare and Switch Electricity Providers in Australia 2026: Your Essential Guide to Beating Rising Bills to ensure they are on the most cost-effective plan. Furthermore, understanding your energy usage and taking advantage of initiatives like the Solar Sharer Offer can further reduce costs. Learning How to Avoid Peak Demand Charges and Slash Your Time-of-Use Electricity Bills in Australia in 2026 can also lead to significant savings. For a broader understanding of government support, refer to Australia’s Energy Bill Relief in 2026: What Support is Still Available?.
| Region | Customer Type | Draft Annual Bill Change (Approx.) | Percentage Change (Approx.) | Primary Driver |
|---|---|---|---|---|
| NSW (AER) | Residential | -$58 to -$226 | -2.4% to -8.2% | Lower wholesale costs |
| NSW (AER) | Small Business | -$379 to -$1,320 | -7.6% to -21.2% | Lower wholesale costs |
| SE QLD (AER) | Residential | -$216 | -10.1% | Lower wholesale costs |
| SE QLD (AER) | Small Business | -$550 | -12.8% | Lower wholesale costs |
| Victoria (ESC) | Households | -$46 | -3% | Lower environmental costs |
| Victoria (ESC) | Small Businesses | -$172 | -5% | Lower environmental costs |
| Regional QLD (QCA) | Households (Tariff 11) | -$212 to -$232 | -9.7% | Lower wholesale costs |
| Regional QLD (QCA) | Small Businesses | (Details to be confirmed) | -11.3% | Lower wholesale costs |
Note: All figures are based on draft determinations and typical usage. Final figures may vary once the AER, ESC, and QCA release their conclusive decisions in late May/early June 2026.