If you've never switched electricity retailer, or if you signed up years ago and let your plan roll over, there's a good chance you're paying the Default Market Offer (DMO) or the Victorian Default Offer (VDO) — the safety-net price set by regulators. It's not the cheapest plan on the market, and it's not meant to be. Understanding how the DMO and VDO work is the single quickest way to tell whether your household is paying 10–25% too much for electricity.
What Is the Default Market Offer?
The Default Market Offer is a maximum price that retailers can charge residential and small business customers on a "standing offer" — the default plan you land on if you never chose a market contract. It's set annually by the Australian Energy Regulator (AER) and applies in New South Wales, South Australia and south-east Queensland.
The DMO exists because before 2019 standing-offer prices drifted higher and higher, and customers who hadn't shopped around were paying 20–40% more than active switchers. The AER caps the price each 1 July based on wholesale costs, network charges, environmental scheme costs and a reasonable retailer margin.
What Is the Victorian Default Offer?
Victoria has its own equivalent, set by the Essential Services Commission (ESC). The Victorian Default Offer applies to customers in Victoria on a standing offer or deemed contract and is reviewed each year. The methodology is similar to the DMO but the zones and numbers differ because Victorian networks and wholesale costs differ.
2025–2026 Reference Prices by Zone
The reference price is the annual cost for a "representative" household using a fixed amount of energy. Actual bills vary with your usage and your tariff, but the reference price is the benchmark every retailer must quote against. Indicative figures for the 2025–26 period:
| Zone | Network | Annual Reference Price (residential, no controlled load) | Usage Basis |
|---|---|---|---|
| NSW — Ausgrid | Sydney, Central Coast, Hunter | $2,100–$2,250 | 3,900 kWh/yr |
| NSW — Endeavour | South-western Sydney, Illawarra | $2,250–$2,450 | 4,900 kWh/yr |
| NSW — Essential Energy | Regional NSW | $2,450–$2,700 | 4,600 kWh/yr |
| South-east QLD — Energex | Brisbane, Gold Coast, Sunshine Coast | $1,900–$2,100 | 4,600 kWh/yr |
| SA — SA Power Networks | All of SA | $2,300–$2,550 | 4,000 kWh/yr |
| VIC — Citipower | Inner Melbourne | $1,550–$1,700 | 4,000 kWh/yr |
| VIC — Powercor | Western VIC | $1,750–$1,950 | 4,000 kWh/yr |
| VIC — AusNet | Eastern VIC | $1,900–$2,100 | 4,000 kWh/yr |
| VIC — Jemena | North-west Melbourne | $1,650–$1,800 | 4,000 kWh/yr |
| VIC — United Energy | South-east Melbourne | $1,700–$1,900 | 4,000 kWh/yr |
Households in Tasmania, Western Australia and the Northern Territory operate under different regulated-tariff arrangements and aren't covered by the DMO or VDO.
Why Retailers Advertise "X% Below the Reference Price"
The DMO and VDO regulations require every retailer advertising a plan in a DMO/VDO zone to quote the plan's annual cost as a percentage above or below the local reference price, on standard usage. This is meant to make comparison simple. In reality, "23% below reference" and "17% below reference" tell you which retailer is cheaper for the reference household — but not necessarily for yours.
It also doesn't tell you whether the reference price itself is high. In zones where the DMO is $2,500/yr, a plan "20% below DMO" is still $2,000. In a lower-cost zone, $2,000 might be the DMO itself. Percentage-below figures are comparative within a zone, not across zones.
How to Benchmark Your Plan Against the DMO or VDO
There are two free, government-run tools that let you compare every plan available to you against the reference price:
- Energy Made Easy (energymadeeasy.gov.au) — run by the AER, covers NSW, SA and south-east QLD.
- Victorian Energy Compare (compare.energy.vic.gov.au) — run by the Victorian Government, covers VIC and often includes a $250 Power Saving Bonus for using the site.
Both tools let you upload a recent bill (or enter your NMI) and show every retail plan ranked by estimated annual cost for your usage — not the reference usage. This is the only reliable way to compare, because your usage profile, tariff type and solar export all affect which plan comes out cheapest.
Are You Paying Too Much?
AER data consistently shows that around 10–15% of residential customers are still on a standing offer (DMO or VDO), and a further 20–30% are on legacy market contracts priced at or above the reference price. If your annual bill divided by your annual kWh usage lands within 5% of the DMO figure for your zone, you're paying the default. If it's above, you're paying more than the default.
In practical terms, the cheapest market offer in a given zone is usually 15–25% below the DMO. A household paying the DMO is typically leaving $300–$600 a year on the table that a 10-minute switch could recover.
Step-by-Step: Finding a Cheaper Plan
- Grab your most recent electricity bill — you need total kWh, tariff type, and NMI.
- Go to Energy Made Easy (NSW/SA/QLD) or Victorian Energy Compare (VIC).
- Enter your address and upload the bill, or type in your usage manually.
- Rank results by "estimated annual cost" for your usage, not by headline discount percentage.
- Look at the top three plans. Read the fact sheet for each — conditional discounts, benefit period, exit fees.
- If the savings are genuinely worth switching, sign up. The new retailer handles the transfer. No change to your meter, no interruption to supply.
Gotchas to Watch Before Signing
- Conditional discounts. A "25% discount off usage" often requires paying on time and by direct debit. Miss a payment and the discount evaporates for that quarter.
- Benefit periods expiring. Many market offers reset after 12 months — the plan you signed up for becomes 10–15% more expensive on the anniversary. Set a calendar reminder.
- Exit fees. Rare on residential contracts now, but check the fact sheet before signing.
- Solar feed-in tariffs. If you have solar, the feed-in rate matters as much as the import rate. A plan with a 30% discount and a 2 c/kWh feed-in may be worse than a plan with a 15% discount and a 10 c/kWh feed-in.
- Demand tariffs and time-of-use. Some "cheapest" plans only win on flat tariffs. If you're on time-of-use or demand, rerun the comparison with the correct tariff selected.
Check Your Own Bill Against the DMO
The fastest way to know whether you're paying too much is to run your current bill through a calculator and compare the result to both the DMO/VDO and to the cheapest plan in your zone. Our Bill Analyser breaks your bill into its components — supply charge, usage charge, demand, feed-in — so you can see exactly where the money is going and how much a switch would save.