Some Australian households and businesses can expect to pay between 0.5 per cent and nearly 10 per cent more for their electricity in the 2025-26 financial year, as rising network costs and a volatile wholesale market continue to drive up bills across almost all of the National Electricity Market (NEM).
Final determinations on the Default Market Offer (DMO) – which caps the price electricity retailers can charge a small proportion of household and small businesses on standing offers – were released on Monday by both the Australian Energy Regulator (AER) and the Essential Services Commission (ESC), which covers Victoria.
The price increases are forecast to be particularly high in New South Wales, where the AER has determined that residential customers on default plans will pay between 8.3% and 9.7% more for their power. (More details below.)
A singular bright spot on the map is the Jemena network, in Victoria, where the ESC says the Victorian Default Offer will see prices fall by $26 in the coming financial year.
The AER says the final decision on DMO 7 was a difficult one, with ongoing pressures across the majority of the cost stack causing increases since the release of DMO 6 in 2024.
AER chair Clare Savage says that while economic conditions appear to have moderated, there is not sufficient evidence of sustained easing of cost-of-living pressures and the Reserve Bank of Australia has noted the economic outlook remains uncertain.
“We know this is not welcome news for consumers in the current cost-of-living environment,” Savage said on Monday.
“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.”
For NSW, the regulator final determination report says network costs have risen in each region of the state, including through expenditure in “important emerging areas” such as improved network resilience to climate change-related risks and the uptake and integration of consumer energy resources.
“The determined NSW Roadmap cost increases and higher transmission costs are also contributing to increases,” the report says.
The annual setting of DMO prices – which also act as a sort of benchmark for all retail electricity offers – has become one of the most closely watched events on the energy market calendar, not least for the inevitable political debate over whether it remains fit for purpose in an increasingly complex energy market.
A key sticking point is that the vast majority of electricity customers on the NEM are not on standing offers and are not directly affected by DMO prices.
In Victoria around 337,000 (or 13 per cent of) households and 56,000 (or 20 per cent of) small businesses are on standing offers. In NSW, the numbers are 8% (households) and 18% (businesses). In South Australia, it’s 7.3% and 16.5% respectively and in south-east Queensland, 8.8% and 18%.
Another point of contention is the DMO’s role as a safety net, meant to protect vulnerable customers, when it is often priced well above more competitive retail electricity market offers.
Savage, in her comments on Monday, stressed that better offers below the DMO price are available, and that retailers are obliged to support customers under national energy laws.
“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.”
Brendan French, the CEO of the Energy Consumers Association, says the ECA is disappointed to see prices going up again.
“We’re very concerned to see a growth in wholesale costs again alongside growth in network prices,” French said on Monday.
“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,” he said.
“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.”
DMO determinations for 2025-26
From 1 July 2025, residential customers on standing offer plans will see increases of 0.5% to 3.7% in south Queensland, 2.3% to 3.2% in SA and 8.3% to 9.7% in NSW. Small business customers on standing offer plans will see increases of 0.8% to 8.5%, depending on the region.
In Victoria, residential customers on the Victorian Default Offer will see prices fall by $26 on the Jemena network but jump by between $4 and $90 in others, compared to 2024–25. The average across the five zones is a $20 (one per cent) increase on last year.
In NSW, the AER says residential customers without controlled load will see price increases of $155 or 8.6% (Ausgrid), $188 or 8.5 (Endeavour Energy) and $228 or 9.1% (Essential Energy).
Residential customers with controlled load will see price increases of $208 or 8.3% (Ausgrid), $271 or 9.7% (Endeavour Energy) and $280 or 9.6% (Essential Energy).
Source: Australian Energy Regulator
Source: Essential Services Commission
