What the Default Market Offer is
The Default Market Offer, or DMO, is a price cap set by the Australian Energy Regulator. It limits what an electricity retailer can charge households and small businesses on a standing offer, which is the default contract you are put on if you never choose a plan, or if your market contract ends and you do nothing.
It started on 1 July 2019 after a series of reviews found that people who did not shop around were paying far more than they needed to. The 2026-27 cap is the eighth, which is why you will sometimes see it called DMO 8. The AER released its final determination on 26 May 2026 and the prices took effect on 1 July 2026.
The DMO is not a single price per kilowatt hour. It is a total yearly bill for a typical customer on each network. A retailer can arrange its standing offer however it likes, with a higher supply charge and a lower usage rate or the other way round, as long as a customer using the benchmark amount would not pay more than the cap.
Where the DMO applies
The DMO covers the parts of the National Electricity Market that do not have their own state price regulation: five distribution networks across three states.
- NSW: Ausgrid, Endeavour Energy and Essential Energy.
- South East Queensland: Energex.
- South Australia: SA Power Networks.
It does not apply in Victoria, which has the Victorian Default Offer, or in regional Queensland, WA, Tasmania, the ACT and the NT, where state regulators or governments set prices directly. See rates in every state for how each one works.
DMO rates for 2026-27
| Network | Annual cap | Benchmark | Usage | Supply | Change |
|---|---|---|---|---|---|
| AusgridNew South Wales | $1,899 | 3,900 kWh | 33.14c | $1.66/day | -3.4% |
| Endeavour EnergyNew South Wales | $2,328 | 4,900 kWh | 33.73c | $1.85/day | -3.4% |
| Essential EnergyNew South Wales | $2,604 | 4,600 kWh | 35.01c | $2.72/day | -5% |
| EnergexSouth East Queensland | $1,988 | 4,600 kWh | 27.97c | $1.92/day | -7.2% |
| SA Power NetworksSouth Australia | $2,334 | 4,000 kWh | 41.91c | $1.80/day | +1.4% |
The benchmark usage differs between networks, so the annual caps are not directly comparable. Ausgrid's $1,899 assumes 3,900 kWh a year, while Endeavour's $2,328 assumes 4,900 kWh. Compare the usage and supply figures, or price the same usage on each network, to see the real gap. On 4,000 kWh a year an SA Power Networks household pays about $400 more than an Ausgrid one on these reference prices.
Why the final prices came in above the draft
The AER's March draft proposed residential cuts of between 1.3% and 10.1%. The final cuts in May were smaller, and South Australia moved from a proposed cut to a 1.4% rise. Draft numbers quoted in early 2026 news stories are not the prices that took effect.
How the AER works out the DMO
The AER builds the price from the cost of supplying a typical household on each network, then adds an allowance for the retailer. The main pieces are:
Wholesale electricity
The cost of buying power from the market, including the cost of hedging against price spikes.
Network charges
What the distribution and transmission businesses charge to move power to your home. These are approved separately by the AER and are a big reason prices differ between networks.
Environmental schemes
The cost to retailers of federal and state schemes such as the Renewable Energy Target and state energy efficiency programs.
Retail costs and margin
Billing, customer service, bad debts and a margin for the retailer.
Each network has its own network charges and its own share of wholesale costs, which is why the cap moves by a different amount on each network every year, and occasionally in a different direction.
Using the DMO to judge a plan
Since the DMO began, every retailer has had to state its offers as a percentage of the reference price for your network. If a plan says it is "12% below the reference price", it means a customer using the benchmark amount would pay 12% less than the DMO cap on that plan.
Standing offer
Capped by the DMO- Price cannot exceed the cap
- No fixed term or exit fee
- Usually the most expensive option
- No discounts or extras
Best for: Short stays, or as a fallback while you compare.
Market offer
Set by retailer- Often well below the DMO
- Choice of tariff types and features
- Prices can change with notice
- Conditions such as paying on time may apply
Best for: Almost everyone who takes ten minutes to compare.
The percentage is a fair starting point but not the whole story. It is calculated at benchmark usage on a flat rate, so a time-of-use plan or a household that uses far more or less than the benchmark can come out differently. Price your own usage in our bill calculator to be sure.
Who the DMO protects
The DMO protects households and small businesses on standing offers in the three DMO regions. Most people are on market offers, so the cap does not limit their price directly. It still matters to them because it sets the reference point that market offers are measured against.
It also shapes new offers. Since 1 July 2026, retailers with more than 1,000 customers in DMO regions must offer the Solar Sharer Offer, with three free hours of power in the middle of the day. The Australian Government has also said it intends to extend DMO protections to customers in embedded networks from the 2027-28 DMO.
Questions about the Default Market Offer
It is the maximum yearly price an electricity retailer can charge a household on a standing offer in NSW, South East Queensland and South Australia. The Australian Energy Regulator sets it each year for every network. Retailers also have to show how their market offers compare to it, so it works as a price ceiling and a benchmark at the same time.
For a residential flat rate customer it is $1,899 a year for Ausgrid at 3,900 kWh, $2,328 for Endeavour at 4,900 kWh, $2,604 for Essential Energy at 4,600 kWh, $1,988 for Energex at 4,600 kWh and $2,334 for SA Power Networks at 4,000 kWh. All include GST and took effect on 1 July 2026.
No. It caps the total annual bill for a customer using the benchmark amount of electricity. A retailer can set its usage and supply charges however it likes on a standing offer, as long as that benchmark customer would not pay more than the cap. The per-kWh figures quoted for each network are the reference split behind the annual number.
In most places, yes. It fell 3.4% for Ausgrid and Endeavour customers, 5.0% for Essential Energy and 7.2% for Energex. South Australia was the exception, with residential prices rising 1.4%. The cuts were smaller than the AER proposed in its March draft.
Only if you are on a standing offer. Your bill or contract will say whether you are on a standing offer or a market offer. If you have never chosen a plan, moved into a home and did not pick one, or your market contract ended without a new one, you may be on a standing offer and could probably save by comparing.
No. Victoria has its own benchmark, the Victorian Default Offer, set by the Essential Services Commission. The DMO also does not apply in regional Queensland, WA, Tasmania, the ACT or the NT, where state regulators or governments set prices directly.
It means a customer using the benchmark amount for your network would pay 10% less on that plan than the DMO cap. Every retailer has to quote this figure. It is a useful quick comparison, but it assumes benchmark usage on a flat rate, so check the plan against your own usage too.
The Australian Energy Regulator sets it under federal regulations. It publishes a draft around March, a final determination in May, and the new prices apply from 1 July each year. The 2026-27 final determination was released on 26 May 2026.
Yes. The AER sets separate DMO prices for small business customers on standing offers in the same regions. Most of the 2026-27 small business prices also fell. This page focuses on the residential figures.
Not yet. Customers in embedded networks, such as many apartment buildings and retirement villages, are not covered by the 2026-27 DMO. The Australian Government has said it intends to extend the protection to them from the 2027-28 DMO. In Victoria, embedded network prices are already capped at the Victorian Default Offer.
Sources
Every rate on this page comes from the regulator or the regulated retailer. Last checked October 2026. Prices include GST unless we say otherwise.