From 1 July 2019, energy companies were required to make a Default Market Offer (or DMO) available to home and small business customers in New South Wales, South Australia and south east Queensland.
The Default Market Offer is the annual maximum total bill amount (called a reference price) energy companies can charge for the ‘standing offer’ prices based on a set average usage amount. It’s a reference price designed to make it easier for customers to compare energy plans across different providers.
Energy retailers are free to set supply and usage charges as long as the total bill is equal or less than the Default Market Offer reference price.
The Default Market Offer can be offered to eligible residential and small business customers in New South Wales, South Australia and south east Queensland from 1 July 2019.
The Default Market Offer will affect everyone differently. If you’re on a Basic Home electricity plan with a flat or controlled load rate or on a Basic Business electricity plan with a flat rate, your rates will have been changed to reflect the Default Market Offer rates for your area from 1 July 2019.
We will have contacted you if your plan rates have changed to Default Market Offer rates.
The Default Market Offer has been introduced by the Federal government to reduce standing offer prices. It’s a reference price designed to make it easier for consumers and businesses to compare energy plans across different providers. It’s intended as a safety net for residential and small business customers in New South Wales, South Australia and south east Queensland, who don’t have the time or access to compare market offers provided by electricity retailers.
The Default Market Offer is the annual total reference price. It will make it easier for consumers to make ‘apples with apples’ comparisons between different energy retailer price offers for electricity.
The Australian Energy Regulator has determined the average annual usage level for each electricity distribution zone, which they will review annually.
These amounts have been determined for the following customers:
1. Residential customers with flat tariffs
2. Residential customers with controlled load
3. Small business customers with flat tariffs
The reference price has been calculated for each electricity zone based on the average usage.
Residential flat tariff
Residential flat tariff
with controlled load
|Ausgrid - NSW||3,900||$1,467||6,800||$2,059||20,000||$7,371|
Endeavour - NSW
Essential - NSW
Energex - QLD
SA Power Networks
Usage is kWh per year and reference prices include gst.
EnergyAustralia will also develop estimated annual costs using the above usage levels for each zone for our market electricity plans and then show the percentage difference between our offer and the reference price.
For example, here is an electricity offer in the Ausgrid distribution zone in NSW:
Estimated annual electricity cost for an average household in the Ausgrid zone, based on an average annual electricity usage amount of 3,900kWH on a residential flat rate.
|An EnergyAustralia plan offer cost for 12 months||$1,276|
|Reference price (annual Default Market Offer cost)||$1,467|
This means EnergyAustralia’s offer is 13% less than the reference price for the average annual electricity usage for a household in the Ausgrid distribution zone.
What’s a distributor?
Your energy distributor is the company responsible for the poles, wires and gas pipes in your area. You’ll find the name of your distributor at the top right hand side of your energy bill.
There are five electricity distribution zones impacted by the Default Market Offer across three states.
Ausgrid is an electricity distributor on Australia’s east coast, maintaining poles and wires to power over 1.7 million homes and businesses.
The area covers parts of Sydney and north west metropolitan areas, Newcastle and as far north as Barry.
Essential Energy’s distribution area maintains the poles and wires to 95% of New South Wales and parts of south east Queensland.
Endeavour Energy maintains the poles and wires to 2.4 million homes and businesses across Sydney's Greater West, Blue Mountains, Southern Highlands, the Illawarra region and the South Coast.
Energex maintains the poles and wires to most parts of south east Queensland which includes Brisbane, Gold Coast, Sunshine Coast, Logan, Ipswich, Redlands and Moreton Bay. It also covers parts of the the New South Wales border north to Gympie and west to the bottom of the Great Dividing Range. This covers about 1.4 million homes and businesses.
SA Power Networks maintains the poles and wires to provide power to 860,000 homes and businesses across South Australia.
Electricity plans are now easy to compare – just look at the percentage difference from the reference price. The bigger the difference off the reference price, the better the deal for you.
It’s a tariff where you’re charged the same rate for electricity throughout the day and night. There is no distinction made between peak and off-peak periods like time of use tariffs.
A flat rate tariff is usually lower than peak, but higher than off peak and shoulder rates.
What is a time of use tariff?
With time of use tariffs, different usage rates are charged for the electricity you use at different times: off peak, shoulder and peak.
- Off peak – charged when the electricity network has low usage, such as overnight.
- Shoulder – a usage rate that sits between peak and controlled load times. Shoulder rates are usually a bit cheaper than peak rates and are available in most states. For example, shoulder times are 7.00am to 3.00pm and 9.00pm to 10.00pm on weekdays, as well as 7.00am to 10.00pm on weekends. These times may differ between states.
- Peak - charged when the electricity network has high usage, such as in the evening or on weekdays.
Controlled load electricity refers to electricity being used by a stand-alone item, like an electric hot water service, electric slab heating and irrigation pumps. Controlled loads are recorded by a separate meter and can be billed as an off-peak rate.
Our Basic Home or Basic Business plan is a standing offer that has no discounts. It applies to a customer who does not actively choose an energy plan with an energy company.
When someone moves into a house and the electricity or gas is already connected, any consumption is charged at the standing offer rates until the resident chooses another energy plan.
If you’re on a Basic Home electricity plan with a flat or controlled load rate or on a Basic Business electricity plan with a flat rate, your standing offer rate will automatically be changed to reflect the Default Market Offer rates for your area from 1 July 2019.
If you’re on a Basic Home or Basic Business plan with time of use rates, the Default Market Offer won’t apply to this rate type and you’ll stay on the current standing offer rate.
The Default Market Offer (or DMO) annual maximum reference prices are set by the Australian Energy Regulator (AER) for each electricity distribution zone in New South Wales, South Australia and south east Queensland. They’ll also review these reference prices annually.
You can read more information about how the AER sets the Default Market Offer price by going to the AER website.
The Default Market Offer applies to:
A Basic Home electricity plan with a flat or controlled load rate or on a Basic Business electricity plan with a flat rate in New South Wales, South Australia and south east Queensland.
The Default Market Offer does not apply to:
- Residential or small business electricity customers on a market plan, which is an energy plan typically with a benefit or incentive (e.g. a discount or a credit to your bill) for a fixed amount of time.
- Gas accounts including bulk hot water
- Time of use tariffs
- Small business electricity controlled load#
- Solar PV#
- Embedded networks
- Prepayment meter tariff
- Basic Home or Basic Business electricity plans in Victoria or the Australian Capital Territory.
#The Federal Government intends to expand the scope of the Default Market Offer to include customers with solar PV tariffs from 1 July 2020.
This is a type of electricity infrastructure generally managed by the building owner. A person living in an apartment complex, retirement home, caravan park or tenant in a shopping centre may be receiving their electricity via an embedded network.
No, the Default Market Offer does not apply in the ACT or outside south east Queensland, as regulated prices are already available under state regulatory arrangements.
No, the Default Market Offer doesn’t apply to gas.
If you’re on a Basic Home electricity plan with flat or controlled load rate or on a Basic Business electricity plan with a flat rate, your price will automatically change to reflect the Default Market Offer rates for your area from 1 July 2019.
We’ll contact you to let you know if your plan rates change to Default Market Offer rates.
The Default Market Offer price is set annually by an independent regulator, the Australian Energy Regulator, according to your specific electricity distribution zone. This means that prices will vary according to your region. The costs for supplying electricity, or the poles and wires, varies from region to region across the country.
- See our home and business plans to check that you’re on the best plan for your needs.
- We have a range to suit everyone, whether you’re looking for great rates, flexibility or price certainty.
How do I find which plan I’m on?
- If you’re not sure what plan you’re on now, go to ‘Your electricity usage and service calculation’ section on page 3 of your home or business bill.
Your 15% guaranteed discount that you have been receiving on your usage since January 2019 will be changed to a 5% guaranteed discount on your usage and daily supply charges, and your rates have also been reduced. This means you’re not worse off. In fact, you may be slightly better off, depending where you live.
Eligible customers can access the Default Market Offer by signing up to our Basic Home or Basic Business plans. However, the Default Market Offer rates are not applied to all rate types and won’t be our best priced plan. If you want to find out what your best options are, we can discuss them with you.
If you’re on a Basic Home electricity plan with flat or controlled load rate or on a Basic Business electricity plan with a flat rate, your price will automatically be changed to reflect the Default Market Offer. We’ll have let you know beforehand.
Everyone’s needs and circumstances are different. View our plans and see which one might suit you best. It only takes 5 minutes to switch.
No. In Victoria it’s called the Victorian Default Offer.
Updates and more information
The Australian Energy Regulator will be reviewing prices annually. We’ll keep updating this page as we get new information and all affected customers will be contacted before any changes are made.