The Default Market Offer (DMO) is a safety-net price for household and small business customers on standing offer plans in New South Wales (NSW), southeast Queensland (SE Queensland) and South Australia (SA). It also acts as a reference price for all other market offers in each region.
Since releasing the draft determination in March, the AER has considered stakeholder feedback and the latest inflation figures and economic forecasts, and included updated wholesale, network, environmental and retail costs.
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.
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,” she said.
“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.”
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.
While economic conditions appear to have moderated in the most recent ABS update, this does not provide sufficient evidence of sustained easing of cost-of-living pressures and the Reserve Bank of Australia has noted the economic outlook remains uncertain.
Savage reinforced that better offers below the DMO price are available, and that retailers are obliged to support customers under national energy laws.
“While the DMO protects consumers on standing offers that can’t or don’t engage in the market, as of this month 90% to 95% of competitive market offers are below the current DMO price. On average, the lowest offers across DMO regions are between 18% and 27% cheaper,” she said.
“I strongly encourage all consumers to avoid staying on an old or uncompetitive plan. Contact your retailer to see if you can get a better offer or shop around. At least every 100 days your retailer must tell you on the front page of your bill if they can offer you a better deal.”
“You can also compare available plans in the market by visiting our free and independent website – Energy Made Easy – www.energymadeeasy.gov.au.”
“Anyone who is struggling to pay their energy bill should contact their retailer as soon as possible to discuss support and visit www.energy.gov.au/rebates to make sure they are accessing all the rebates and concessions they’re entitled to.”
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