Most households in Australia will see their energy bills fall in the next financial year due to new regulatory prices.
The Australian Energy Regulator (AER) announced on Tuesday that the default energy price will be reduced. This guides the maximum price retailers can charge customers, and its impact varies from state-to-state.
AER said the decision was based on increased levels of renewable energy production.
Here’s what you need to know.
Background
The AER is the independent, national regulator for energy performance.
Each year, it releases a Default Market Offer (DMO), also called a ‘safety net’.
The DMO is the maximum amount energy companies can charge on astandard consumer account. It is updated annually based on energy market conditions.
While it is mandated in NSW, SA, and SE Queensland, power companies in the rest of the country (aside from WA) use the DMO as a guide for how much to charge.
Latest DMO
On Tuesday, the AER announced the new average household energy cost.
Based on combined range of flat rate and time of use.
*SA households will see an increase.
Why?
AER Chair Clare Savage said the reduction is due to an increase in renewable energy contribution to the grid, as well as better battery storage.
Energy Minister Chris Bowen said Australia has “the best sun and wind in the world”.
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Bowen added that renewables are being used to “shield our grid from global energy volatility”.
Other states
On Monday, the Victorian equivalent of the DMO (called the VDO) was announced for next financial year.
The average household will save around $84, which looks like an annual bill of $1,591.
In WA, changes to electricity prices are determined through the State Budget.
As announced in the 2026-27 Budget, standard residential plans will increase by 2.75%.
Response
NSW Premier Chris Minns called the DMO “the first encouraging sign in a long time that electricity prices are starting to head in the right direction.”
QLD Premier David Crisafulli said the Government is “now asking the energy retailers to ensure every household and business receive these savings in their power bills.”
South Australian Energy Minister Tom Koutsantonis echoed this, saying the Government “expects” energy retailers “to pass on the cost savings”.
“This is a positive outcome with prices coming down for the majority of households and all small businesses... The reductions compared to last year reflect easing costs across most components of the DMO," AER Chair Clare Savage said on Tuesday.
Opposition
Shadow Energy Minister Dan Tehan said that electricity prices have risen since Labor was elected in 2022.
“Energy prices have risen by $1,300... with no guarantee they won’t continue to rise,” he said.
Tehan also highlighted a 2022 election promise, where now-Prime Minister Anthony Albanese said households would see a $275 discount on energy bills by 2025.
“Aussie families are still waiting to see the promised $275 cut,” he added.
