The Australian Energy Regulator (AER) has released its final determination for the Default Market Offer (DMO) for electricity prices in 2025–26, which shows growth in wholesale costs alongside growth in network prices.
The DMO is a safety-net price for household and small business customers on standing offer plans in New South Wales (NSW), South East Queensland (SE Queensland) and South Australia (SA). It also acts as a reference price for all other market offers in each region.
The final DMO determination prices vary slightly from the draft prices, with some decreases in SA and SE Queensland prices and small increases in some NSW prices. In NSW, the small increases are largely due to increased costs associated with wholesale electricity contracts for 2025–26.
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From 1 July 2025, residential customers on standing offer plans will experience increases of 0.5% to 3.7% in SE Queensland, 2.3% to 3.2% in SA and 8.3% to 9.7% in NSW. Small business customers on standing offer plans will experience increases of 0.8% to 8.5%, depending on the region.
AER chair Clare Savage said it was a difficult decision, with ongoing pressures across the majority of the DMO cost stack causing increases since the release of DMO 6 in 2024.
“We know this is not welcome news for consumers in the current cost-of-living environment. As noted in our draft determination, sustained pressures across almost all components of the DMO have driven these price rises, with wholesale and network costs rising in most jurisdictions between 1% and 11%, and retail costs between 8% and 35% compared with last year.
“Since the draft determination we have used our compulsory information gathering powers to further scrutinise retail costs and refined part of this component of the DMO as a result,” Savage said.
Consistent with the draft determination, and having considered stakeholder feedback and current economic conditions, the AER has also decided not to apply a competition allowance.
“Not including the competition allowance will alleviate a small amount of cost-of-living pressure on consumers,” Savage said.
Energy Consumers Australia CEO Dr Brendan French said he was disappointed to see electricity prices increase for households and small businesses.
“The DMO exists to protect people, particularly those in vulnerable circumstances, from paying disproportionately high electricity prices. It’s not working effectively if it is priced 18 to 27% above more competitive offers,” he said.
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“We’re pleased that the AER has again taken out the retailer competition allowance, but we’re very concerned to see a growth in wholesale costs again alongside growth in network prices.
“The sector should be focused on reducing costs at all stages of the supply chain, and making networks as efficient as possible, otherwise consumers risk losing the benefits of the energy transition.
“We’ll be releasing a report about the wholesale market in July that will look at structural issues, which as we’ve seen today, have real-world consequences for consumers’ bills.”
