Power price relief could be on the way for Australian households, with the country’s energy regulators proposing lower default electricity costs from July 1.
The Australian Energy Regulator (AER) and the Essential Services Commission (ESC) have released their respective draft determinations for energy default offers in 2024-25. The AER’S Default Market Offer (DMO) will impact electricity price caps in New South Wales, south-east Queensland and South Australia, while the ESC’s Victorian Default Offer (VDO) is exclusive to Victorian energy customers.
The AER is proposing an annual drop in default market costs between 0.4% and 7.1% for the majority of residential customers, although some homes on a controlled load tariff may see increases of up to 2.7% year-on-year. Small businesses will also be affected, with prices expected to decrease between 0.3% and 9.7% when compared to 2023-24.
The ESC’s draft determination offers an annual default price decrease of up to 6.4% for residential customers in Victoria – a saving of about $112 – and up to 7% lower for businesses.
See what pricing changes could be coming in your state:
Why are the DMO and VDO decreasing?
The DMO and VDO are electricity price ‘safety nets’ for customers in NSW, Vic, SEQ and SA who don’t engage with the energy market by shopping around. These default offers set a price cap on how much energy providers can charge customers who aren’t on a more competitive market offer. The DMO also serves as a reference price to help customers compare the annual cost of plans.
While the DMO is designed to be a maximum for default offer prices, the VDO is a more ‘reasonably priced’ option that the ESC considers to be fair for consumers. However, both the DMO and VDO are generally more expensive than market offers, which include rates set by energy retailers and often come with incentives such as discounts or bill credits.
The 2024-25 draft is a welcome change after several years of market mayhem, which saw default power prices jump as much as 25% last year. AER Chair Clare Savage said this year’s draft determination aimed to balance the needs of customers with the margins necessary for energy retailers to recover costs.
“We know that economic conditions have put pressure on many Australians and the increases in electricity prices over the last two years has made energy less affordable for many households. In light of this, the AER has, in this decision, placed increased weight on protecting consumers,” she said.
“Our draft determination should still allow a retailer to recover their costs and make a reasonable profit with a retail margin of 6% for residential plans and 11% for small business plans. These are higher margins than we see in other markets, such as Victoria, where strong competition remains.”
The final decisions for both the DMO and VDO will be made in May, and the AER and ESC invite written submissions on the determination from now until mid-April. Once finalised, the new default pricing will apply from July 1.
Draft DMO for NSW
If the draft DMO is locked in, customers in NSW on default market offers may see their annual bills decrease by 3% for single rate tariffs – a saving of about $54 over 2023-24 pricing. Controlled load users can expect a bill drop of up to 7.1%, or $211, while small businesses could see prices lowered by up to 9.7%, or $487 annually.
NSW Drafted DMO Prices Residential Customers (single-rate only)
| Distribution Network | 2024-25 Draft DMO Prices | Annual Change |
|---|---|---|
| Ausgrid | $1,773 | -$54 (-3%) |
| Endeavour Energy | $2,185 | -$43 (-1.9%) |
| Essential Energy | $2,549 | +$22 (+0.9%) |
NSW Drafted DMO Prices Residential Customers (controlled load)
| Distribution Network | 2024-25 Draft DMO Prices | Annual Change |
|---|---|---|
| Ausgrid | $2,476 | -$86 (-3.4%) |
| Endeavour Energy | $2,766 | -$211 (-7.1%) |
| Essential Energy | $2,964 | -$13 (-0.4%) |
NSW Drafted DMO Prices Small Business Customers (single-rate only)
| Distribution Network | 2024-25 Draft DMO Prices | Annual Change |
|---|---|---|
| Ausgrid | $4,512 | -$487 (-9.7%) |
| Endeavour Energy | $4,394 | -$204 (-4.4%) |
| Essential Energy | $5,802 | +$41 (+0.7%) |
Source: AER Default Market Offer 2024–25 draft determination – March 19, 2024.
NSW electricity plans currently cheaper than the DMO
Here are some sponsored deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Ausgrid energy network in Sydney but prices may vary depending on your circumstances. This comparison assumes general energy usage of 3900kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
 |
|
11% Less than reference price |
$1,614 Price/year (estimated) |
Go to Site |
 |
|
18% Less than reference price |
$1,491 Price/year (estimated) |
Go to Site |
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Ausgrid network in Sydney but prices may vary depending on your circumstances. This comparison assumes general energy usage of 3900kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Draft DMO for SEQ
The AER’s draft DMO for SEQ’s Energex network forecasts an annual increase of 2.7% for single-rate residential customers, with no changes for households on a controlled load tariff. Small businesses may see a minor bill decrease of 0.3%.
SEQ Drafted DMO Prices Residential Customers (single-rate only)
| Distribution Network | 2024-25 Draft DMO Prices | Annual Change |
|---|---|---|
| Energex | $1,969 | +$53 (+2.7%) |
SEQ Drafted DMO Prices Residential Customers (controlled load)
| Distribution Network | 2024-25 Draft DMO Prices | Annual Change |
|---|---|---|
| Energex | $2,363 | $0 (0%) |
SEQ Drafted DMO Prices Small Business Customers (single-rate only)
| Distribution Network | 2024-25 Draft DMO Prices | Annual Change |
|---|---|---|
| Energex | $4,202 | -$11 (-0.3%) |
Source: AER Default Market Offer 2024–25 draft determination – March 19, 2024.
SEQ electricity plans currently cheaper than the DMO
Here are some sponsored deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from our referral partners†. These costs are based on the Energex network in Brisbane but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4600kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
|
|
4% Less than reference price |
$1,990 Price/year (estimated) |
Go to Site |
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Energex network in Brisbane but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4600kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Draft DMO for SA
If the drafted price change goes ahead, residential customers in SA paying default power prices on a single-rate tariff could see their bills decrease by $57. Small business customers are predicted to save up to $481, with prices lowering by 8.2%.
SA Drafted DMO Prices Residential Customers (single-rate only)
| Distribution Network | 2024-25 Draft DMO Prices | Annual Change |
|---|---|---|
| SAPN | $2,279 | -$57 (-2.5%) |
SA Drafted DMO Prices Residential Customers (controlled load)
| Distribution Network | 2024-25 Draft DMO Prices | Annual Change |
|---|---|---|
| SAPN | $2,773 | -$14 (-0.5%) |
SA Drafted DMO Prices Small Business Customers (single-rate only)
| Distribution Network | 2023-24 Draft DMO Prices | Annual Change |
|---|---|---|
| SAPN | $5,368 | -$481 (-8.2%) |
Source: AER Default Market Offer 2024–25 draft determination – March 19, 2024.
SA electricity plans currently cheaper than the DMO
Here are some sponsored deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from our referral partners†. These costs are based on the SA Power network in Adelaide but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
|
|
6% Less than reference price |
$2,103 Price/year (estimated) |
Go to Site |
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the SA Power network in Adelaide but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Draft VDO for VIC
Customers in Victoria on a default offer could see their yearly bills drop by $112, or 6.4% when compared to the ESC’s 2023-24 pricing. Small businesses can also anticipate a price cut of $266 annually, or 7%.
The ESC bases these figures on averages across Victoria’s five electricity distribution networks. Actual prices will vary depending on your location and tariff type.
VIC electricity plans currently cheaper than the VDO
Here are some sponsored deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Citipower network in Melbourne but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
|
|
10% Less than VDO |
$1,304 Price/year (estimated) |
Go to Site |
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. Costs are based on the Citipower network in Melbourne but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Does this mean all power plans will drop in price?
The DMO and VDO will directly impact homes and businesses on default energy offers, also known as standing offers. If you haven’t changed your energy provider or plan in over 12 months, there’s a good chance you’re on a standing or default offer, and may be impacted by the above price changes from July 1.
The percentage of Australians on standing offers is relatively low. According to AER data, 8.6% of residential customers in NSW, 9.4% in SEQ, and 7.6% in SA are on standing offers – in total, around 8.6% of customers in DMO markets, or 495,884 homes. In VIC, the ESC says that approximately 360,000 residential customers are on the VDO, and around 176,000 in embedded networks where the VDO also applies.
However, customers not on standing offers may still feel the impact from July 1. Energy retailers tend to use the DMO and VDO as a baseline for their own market offer pricing, so providers will typically adjust their plans and rates across the board once the new default pricing comes into affect.
While the decrease in default prices is a positive for customers on standing offers, there’s still room for Aussies to cut their bills even further by moving to a market offer. These plans are much more competitively priced in all states: as of March 11, 94% of market offers in Canstar Blue’s database were cheaper than the reference price.
To give you an idea of how much you could save, we’ve listed the average discount on the reference price available on market offer plans for each distributor below.
NSW
| Distribution Network | Reference Price | Average Reference Price Discount (Market Offer Plans) | Difference |
|---|---|---|---|
| Ausgrid | $1,827 | -12% | -$219 |
| Endeavour Energy | $2,228 | -12% | -$267 |
| Essential Energy | $2,527 | -10% | -$253 |
VIC
| Distribution Network | Reference Price | Average Reference Price Discount (Market Offer Plans) | Difference |
|---|---|---|---|
| AusNet Services | $2,026 | -17% | -$344 |
| Citipower | $1,571 | -18% | -$283 |
| Jemena | $1,720 | -18% | -$310 |
| Powercor | $1,793 | -18% | -$323 |
| United Energy | $1,666 | -18% | -$300 |
SEQ
| Distribution Network | Reference Price | Average Reference Price Discount (Market Offer Plans) | Difference |
|---|---|---|---|
| Energex | $1,969 | -8% | -$158 |
SA
| Distribution Network | Reference Price | Average Reference Price Discount (Market Offer Plans) | Difference |
|---|---|---|---|
| SA Power Networks | $2,279 | -7% | -$160 |
Source: www.canstar.com.au – 11/03/2024. Based on single-rate electricity plans on Canstar’s database; excluding solar-only plans. Annual costs calculated based on the estimated lowest possible price a representative customer would be charged in a year, assuming all conditions of discount offered (if any) have been met. Representative customer based on the reference usage for NSW, VIC, QLD and SA (per Victorian Default Offer for VIC, ICRC for ACT and AER for others). Calculations based on market offer plans with an annual cost lower than the reference price.
Share this article