Default Market Offer explained

The Default Market Offer (DMO) is easy to over-read. It is not a government electricity plan. It is not a promise that your bill will fall in July. It is an annual price determined by the Australian Energy Regulator that does two jobs: it caps standing offers for small customers in specified networks, and it gives retailers a reference price they must use when they advertise market offers.

If you live in New South Wales, south-east Queensland or metropolitan South Australia, the DMO is the number behind phrases such as "15 per cent less than the reference price". If you live in Victoria, skip this page and read the Victorian Default Offer explained. If you live in Western Australia, the DMO does not apply at all.

What the DMO is for

Standing offers exist so that a household that never shops around still has a lawful default contract. Before the DMO, those defaults could sit well above the market. The AER now sets a maximum annual price for a representative customer on a standing offer in each DMO network. Retailers may price standing offers at or below that cap. They may not price them above it.

The second job is advertising. Market offers are not capped at the DMO. A retailer can sell a market offer that would cost more than the DMO at the representative usage — but if they advertise a comparison, they have to do it against the DMO reference price, using the AER's rules. That is why two plans can both claim to be "below the DMO" and still differ by hundreds of dollars at your usage.

The DMO is reset every year, usually taking effect on 1 July. The 2026-27 determination applies from 1 July 2026. Retailers then republish standing-offer prices and rewrite market-offer fact sheets. That July letter in your inbox is often just the annual reset, not a personal penalty.

Who it applies to

The DMO applies to small customers — households and small businesses under the consumption threshold — on standing offers in these distribution networks:

• Ausgrid, Endeavour Energy and Essential Energy in New South Wales
• Energex in south-east Queensland
• SA Power Networks in South Australia

It does not set prices for:

• Victoria (the Essential Services Commission sets the VDO)
• Western Australia (see the Western Australian electricity market)
• the Northern Territory
• regional Queensland outside Energex, where Ergon Retail remains the default
• Tasmania and the ACT for the standing-offer cap itself, even though those jurisdictions sit on Energy Made Easy for comparison

Embedded networks, some exempt sellers and large-business contracts sit outside the ordinary DMO consumer product. If your block of units has an embedded network, the DMO is at best a reference point in a complaint, not an automatic right.

The DMO also does not choose your retailer. The poles and wires stay with the distributor. You still pick a retailer and a plan. How electricity markets differ across Australian states is the map if you have just moved interstate.

Standing-offer cap versus advertising reference price

These two uses of the same number confuse people, and retailers are not always careful with the distinction.

As a cap, the DMO limits the standing offer. If you have never signed a market offer, or you were moved back to a standing offer when a contract ended, your usage and supply rates should produce an annual bill no higher than the DMO at the AER's assumed usage and tariff shape. If your usage is higher or lower than the assumed household, your actual bill will not equal the published DMO dollar figure. The cap still binds the rates.

As a reference price, the DMO is the stick in advertising. A market offer might be described as a percentage below the DMO. That percentage is calculated on the AER's representative customer, on the tariff type the rules specify, before your solar, your pool, or your work-from-home pattern. It is a comparison aid. It is not a forecast.

A plan that is 8 per cent below the DMO on a fact sheet can still be a poor fit if:

• you are on a time-of-use or demand tariff and the advertising assumed a single rate
• the discount is conditional and you miss a due date
• the supply charge is high and you use few kilowatt hours
• a solar feed-in in the advertising is more generous than the rate on the contract you are offered

Compare plans on estimated annual cost at your usage. The DMO figure is the yardstick, not the quote. How to compare electricity plans in Australia sets out the inputs.

The 2026-27 DMO figures

From 1 July 2026 the AER's residential DMO annual amounts, at each network's assumed usage, are:

• Ausgrid (NSW): $1,899 at 3,900 kWh, down 3.4 per cent
• Endeavour Energy (NSW): $2,328 at 4,900 kWh, down 3.4 per cent
• Essential Energy (NSW): $2,604 at 4,600 kWh, down 5 per cent
• Energex (south-east Queensland): $1,988 at 4,600 kWh, down 7.2 per cent
• SA Power Networks: $2,334 at 4,000 kWh, up 1.4 per cent

Two details matter more than the headline dollars.

First, usage is not the same in every network. The AER is not saying a Sydney house and a Townsville house use the same electricity. It is pricing a representative customer for that network. If you compare a $1,899 Ausgrid DMO with a $2,334 South Australian DMO and conclude South Australia is "dearer by $435", you are mixing different assumed kilowatt hours as well as different prices.

Second, the direction of travel is not uniform. Most DMO networks fall in 2026-27. South Australia rises slightly. Wholesale costs, network revenues and environmental scheme costs do not move in lockstep. Why Australian electricity prices change unpacks the stack.

Small-business DMO figures are published separately and use different annual consumption. Do not apply the residential numbers above to a shop or a workshop. Small business electricity contracts covers that product.

Solar Sharer in DMO areas

Alongside the ordinary DMO, eligible customers in DMO networks can access a Solar Sharer Offer. It is aimed at households with a smart meter. The design is a free midday window — when rooftop solar is abundant and wholesale prices are often low — with a cap on the free kilowatt hours. Use the cheap window for dishwashers, washing machines, pool pumps and EV charging if you can shift them. Do not assume unlimited free power.

Solar Sharer is not a feed-in tariff. It does not change what you are paid for exports. It changes what you pay for imports in the middle of the day. Households without solar can still benefit if they can shift load. Households with solar may find they already cover midday usage from the roof and need a sharper look at evening rates instead.

Eligibility, the exact clock times and the kilowatt-hour cap sit with the official offer rules and the retailer's fact sheet. Read the Solar Sharer Offer explained before you rebuild a routine around a free window that may be smaller than social media suggests.

Solar customers should still compare feed-in rates and evening usage rates. A Solar Sharer plan with a weak feed-in and a high peak rate can lose to an ordinary market offer if most of your grid use is after 4 pm. Solar feed-in tariffs and plans for solar households are the companion pieces.

What the DMO does not do

The DMO does not apply in Victoria. Victorians have the VDO, a different regulator, a different comparison site and different network areas (CitiPower, Powercor, United Energy, Jemena, AusNet). Do not paste a DMO percentage onto a Victorian fact sheet.

The DMO does not apply in Western Australia. There is no national retailer choice of the east-coast kind in the SWIS, and Horizon Power towns are another arrangement again.

The DMO does not cap every market offer. It does not freeze your bill if your usage rises. It does not include your solar exports as a reduction in the published annual figure. It does not set gas prices. It does not replace Energy Made Easy: you still need to compare plans on Energy Made Easy with your NMI and your kilowatt hours.

It also does not tell you which retailer is cheapest. No responsible guide can. Standing-offer rates are public. Market offers move. Conditional discounts lapse. The useful habit is to treat the DMO as the ceiling on the default product and as the advertising stick, then do the comparison on your own usage each year after the 1 July reset.