HomeFinancePower prices to drop in some regions in new default market offer

Power prices to drop in some regions in new default market offer

Most Aussies will see their power bills fall over the next year, after the release of the Default Market Offer (DMO) for 2024-25.

The cost of power generation has fallen, and so should the wholesale power price, says the Australian Energy Regulator (AER) in its draft determination of the DMO for this year.

Under the proposed changes, a majority of residential customers would see price reductions of between 0.4 and 7.1 per cent.

And for those facing an increase, the jump will be between 0.9 and 2.7 per cent, depending on their region. The AER notes these increases are lower than inflation.

It’s welcome news after two years of massive hikes to the DMO, including increases of up to 25 per cent in some areas last year.

Keeping cost of living down

Clare Savage, AER chair, says keeping the nation’s power bills under control was front and centre for the AER when making its price determination.

“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,” she says.

“In light of this the AER has, in this decision, placed increased weight on protecting consumers.

She adds that while the costs associated with generating power have been dropping, the cost of transmitting that power has risen, keeping power prices from falling as far as the AER would have liked.

“While wholesale markets have stabilised since their extreme peaks of 2022, this easing has been offset by the pressures we are observing in network prices,” Ms Savage says.

“Poles and wires costs are a large component of retail prices, comprising around 40 per cent of the price.”

What is the DMO?

The DMO acts as a kind of baseline default energy price for those who can’t or won’t shop around for the best energy deal. The DMO covers consumers in NSW, South Australia and south-east Queensland.

Each year, the AER determines the price cap point for the DMO, which then comes into effect from 1 July.

It’s important to note that what the AER released today is a draft determination and does not represent the final DMO. The figures presented are subject to feedback and review from stakeholders before a final decision is made.

What about the other states?

As the DMO only covers two states and part of a third, a good chunk of Australia is not affected by this price.

Western Australia operates on its own power grid, separate from National Energy Market (NEM), while Tasmania, the rest of Queensland and the two territories (NT and ACT) have their default energy offers set directly by the state or territory government.

Notably, Victoria has its own energy regulator, the Essential Services Commission (ESC), which sets a separate default offer in that state, known as the Victorian Default Offer (VDO).

This year’s VDO draft proposes to reduce the price by around $112 per year, or 6.4 per cent.

Kate Symons, chair of the ESC, points out that default offers represent a maximum price people can be charged for power, but many retailers offer better deals if customers are willing to shop around.

“The VDO provides a safety net, ensuring those who don’t engage in the market still pay a fair price for their electricity usage,” she says.

“However, many retailers offer deals that are cheaper than the VDO, and we encourage all consumers to shop around. 

“We understand affordability remains front of mind for consumers. Electricity retailers are obliged to communicate their best electricity offer to customers on their bills at least once every three months.”

Are you on your state or territory’s default offer for electricity? Have you had better luck shopping around? Let us know in the comments section below.

Also read: Too many Aussies ignoring valuable energy rebates

Brad Lockyer
Brad Lockyerhttps://www.yourlifechoices.com.au/author/bradlockyer/
Brad has deep knowledge of retirement income, including Age Pension and other government entitlements, as well as health, money and lifestyle issues facing older Australians. Keen interests in current affairs, politics, sport and entertainment. Digital media professional with more than 10 years experience in the industry.


  1. In SA I heard today small businesses get $500, households $57 wow!!! big deal !! I’m retired, live in a cold cottage my QUATERLY WINTER power bill is close to $1000, better than nothing but still peanuts.

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