Understanding the Default Market Offer
Default Market Offer: The basics
What is the Default Market Offer for electricity?
The Default Market Offer (DMO) is a reference price or ‘standing offer’ that is set by the Australian Energy Regulator (AER) each year. It’s designed to be a reasonably priced energy offer that small business and residential customers can choose to be on as a safety net if they don’t want to engage with the competitive energy market. If you live in area where the DMO is available, retailers will use the reference price as a benchmark for their own market offers, and the price difference will be listed as a percentage (e.g. ‘this offer is 12% less than the reference price’).
Why was the Default Market Offer introduced?
The Default Market Offer was introduced to ensure Australians don’t pay an unreasonable amount for their electricity, and is the most electricity retailers can charge you on a standing offer. It also serves as a reference price for retailers when they set their own, competitive market offers. Essentially, the DMO serves to make sure you, the customer, aren’t overpaying for your electricity while also ensuring retailers are able to maintain their business.
How much does the Default Market Offer cost?
The DMO price determination is updated yearly, with the final decision going into effect on 1st July each year to correctly reflect the current electricity market conditions. While the exact amount you’ll be charged will vary based on your electricity use, your distribution zone and the type of tariff you’re on, the average yearly electricity bill while on the Default Market Offer for 2024-2025 is listed below:
| Distribution zone | Residential with no controlled load (with 3,900 kWh annual usage) | Residential with controlled load (with flat rate of 4,800 kWh and controlled load 2,000 kWh annual usage) | Small business without controlled load (with 10,000 kWh annual usage) |
|---|---|---|---|
| Ausgrid | $1,810 | $2,509 | $4,612 |
| Endeavour Energy | $2,223 | $2,801 | $4,422 |
| Essential Energy | $2,513 | $2,931 | $5,733 |
| Energex | $2,066 | $2,414 | $4,261 |
| SA Power Networks | $2,230 | $2,760 | $5,352 |
| Source: Australian Energy Regular (AER) – Australian Government. 2024-2025 Default market offer prices: Final determination. Published 3 June 2024. Accessed November 2024. | |||
Understanding the Default Market Offer
Is the DMO available to everyone?
The DMO is only available to those living in unregulated areas of the National Electricity Market (NEM). This includes:
- South East Queensland (QLD)
- New South Wales (NSW)
- South Australia (SA).
There is no Default Market Offer in Victoria (VIC), however, the Victorian Default Offer (VDO) will be available to you instead. The DMO is also not available in the ACT (but they do have similar energy regulation in place, known as the reference price), or in the Northern Territory, Tasmania or Western Australia, where electricity is more regulated.
If you live in a residence with an embedded network, the DMO also won’t be available to you. Instead, you’ll be receiving your electricity through your embedded network managers that on sells electricity to you after purchasing it from an electricity retailer.
DMO vs market offer: What’s the difference?
The Default Market Offer is a government-regulated reference price while market offers are set by individual retailers and are typically cheaper than the DMO. Unlike the DMO, market offers may also have incentives, discounts and other perks. Typically, you’ll be on the DMO only if you chose not to engage in the electricity market, or if the benefit period of your market offer expired and you were rolled onto your retailer’s standing offer.
How will I know if I’m on the best electricity plan?
Your retailer is obliged to tell you each quarter if they have a cheaper option than the electricity plan that you’re currently on. This may benefit you if you haven’t changed electricity plans in more than a year, as your rates have probably changed, with the loss of discounts or perks.
But the best way to save is to compare plans yourself. By comparing energy retailers and plans across different retailers, you may be able to save on your energy bills. By shopping around, you can compare different deals and discounts to find a plan that best suits the energy needs of you and your household.
Meet our energy expert, Meredith O’Brien
As the Head of Energy at Compare the Market, Meredith O’Brien believes in educating Australian customers about the everchanging gas and electricity market so they can adjust their energy usage habits and get the most out of their energy plans.
Meredith has six years within the energy industry, following 15 years of experience in financial services and is currently studying a Master of Business Administration. Meredith is a dedicated customer advocate who is passionate about empowering Australians to find the right products to suit their needs by removing the confusion from comparing.
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1 Australian Energy Regular (AER) – Australian Government. 2024-2025 Default market offer prices: Final determination. Published 3 June 2024. Accessed November 2024.