The Australian Energy Regulator (AER) has released its final price determination for 2026-27, confirming electricity prices will fall for most households and small businesses on the Default Market Offer (DMO) from 1 July.
The DMO provides a regulated safety net for households and small businesses on standing offer electricity plans and acts as a reference price to help consumers compare market offers.
In the three regions where the DMO applies, the residential flat rate standing offer price will fall by between 3.4% and 5.0% in New South Wales and by 7.2% in South East Queensland compared to last year, while South Australian households will have a modest increase of 1.4%.
Related article: AER’s draft DMO signals possible price reductions
For smart meter households on a time of use standing offer, there are savings across all three regions, from a 1.1% decrease in South Australia to up to 10.7% in South East Queensland. New South Wales reductions range between 3.7% and 7.7%.
Small businesses will see reductions across all three DMO regions, with prices decreasing from 6.8% to 12.1% in South Australia, 10.4% to 14.0% in South East Queensland, and 9.0% to 20.9% in New South Wales, depending on whether their standing offer uses a flat rate or time of use tariff.
AER chair Clare Savage said, “This is a positive outcome with prices coming down for the majority of households and all small businesses across the three regions where the DMO safety net applies.
“The reductions compared to last year reflect easing costs across most components of the DMO, particularly in wholesale energy, where we’ve seen lower electricity contract prices, reduced spot price volatility, and increased output from wind and battery generation during evening peaks.”
“Despite uncertainty created by conflict in the Middle East, wholesale energy costs have not increased.”
Savage said recent government reforms meant the DMO was now calculated using only efficient costs, and in applying the new methodology, adjustments had been made from the draft to the final decision.
“Following extensive consultation after the release of our draft decision, we have adjusted our approach to applying network costs, which is to now blend network tariffs for customers on flat rate retail tariffs to better reflect the mix of older-style legacy meters and newer smart meters across the population,” she said.
“Our energy system is progressing towards full implementation of smart meters by 2030, so this decision reflects this transition.”
“Throughout this process, we’ve maintained a strong focus on ensuring consumers have access to a trusted, fair, and reasonably priced Default Market Offer that will remain fixed for the next 12 months.”
For the first time, retailers will be required to offer a default Solar Sharer Offer, announced earlier this year as a way for more households, including those without rooftop solar, to make better use of Australia’s abundant solar generation.
Related article: Renewables over 50%, wholesale prices down… Is the energy transition succeeding?
The opt-in energy plan for customers with smart meters provides three hours of free electricity in the middle of the day, allowing those who can shift their usage to this period to potentially reduce their bills.
As a consumer safeguard, the price of the Solar Sharer Offer will be regulated using the same annual price as the time of use DMO available in each distribution zone.
