DMO and VDO 2026-27: what the reference price means

The Default Market Offer (DMO) and the Victorian Default Offer (VDO) are electricity prices set by a regulator once a year. They do two jobs: they limit what a retailer can charge you on a standing offer, and they are the yardstick every advertised plan has to be measured against. When an ad says “12% less than the reference price”, the reference price is the DMO or the VDO for your area.

Both were reset on 1 July 2026 and stay fixed until 30 June 2027.

Where each one applies

The DMO is set by the Australian Energy Regulator (AER). It covers households and small businesses in New South Wales, south-east Queensland and South Australia, which means five distribution networks: Ausgrid, Endeavour Energy and Essential Energy in NSW, Energex in south-east Queensland and SA Power Networks in South Australia.

The VDO is set by the Essential Services Commission (ESC) and covers Victoria’s five zones: AusNet Services, CitiPower, Jemena, Powercor and United Energy.

Your network is printed on your bill. You do not choose it; it depends on where you live. If you live elsewhere, neither price applies to you. The ACCC, which enforces the advertising rules that go with the DMO, notes that consumers in other parts of Australia have different protections set by their state and territory governments.

Both are electricity prices. There is no DMO or VDO for gas.

The DMO figures for 2026-27

The AER publishes one annual comparison price for each network, based on a benchmark amount of electricity. These are the residential flat rate figures that apply from 1 July 2026:

Compared with 2025-26, the AER said the residential flat rate price fell by between 3.4% and 5.0% in NSW and by 7.2% in south-east Queensland, and rose by 1.4% in South Australia. It put the falls down mainly to lower wholesale energy costs.

There is a separate, slightly lower comparison price for time-of-use plans in each network, for example $1,893 in the Ausgrid area. The same figure is used for the new Solar Sharer Offer, an opt-in standing offer for homes with a smart meter that includes three free hours of electricity in the middle of the day.

The VDO figures for 2026-27

The ESC sets tariffs for each zone instead of a single annual price. The domestic flat tariffs, including GST, are:

For a home using 4,000 kWh a year on a flat rate, the ESC puts the average VDO bill at $1,591, down from $1,675 in 2025-26. That is a fall of about 5%, which the ESC attributes to lower environmental, wholesale and network costs.

In Victoria the VDO is also the maximum price for all households and most businesses in embedded networks, such as apartment complexes, retirement homes and caravan parks.

Reading a percentage in an ad

Retailers in DMO areas must show how each plan compares with the DMO in all advertising and promotion. In Victoria, the ESC says all retailers must state how their offers compare with the VDO when they advertise prices.

The percentage is worked out for the benchmark household, not for you. Take the Ausgrid figure. A plan advertised at 10% less than the reference price would cost a home using exactly 3,900 kWh a year about $1,709, which is $1,899 less 10%. A plan at 20% less would cost about $1,519 for the same usage.

Three things follow from that.

The percentage lets you rank plans against each other in the same network. A plan at 18% below is cheaper for the benchmark household than one at 9% below.

The dollar figure is not a quote for your home. The AER is explicit that the comparison prices do not show how much you will pay and that the DMO is not a cap on customer bills. A household that uses 7,000 kWh, or has solar and imports very little, will land somewhere else.

A percentage cannot be carried across networks. Ten per cent below in the Essential Energy area starts from $2,604, not $1,899, so the same headline means different money.

The ACCC’s code also covers how conditional discounts are shown, so check whether the number in large type depends on something like paying on time. If you may miss a due date now and then, look at the price without the condition.

Are you on a standing offer?

Probably not. Energy Made Easy says around 8.3% of households and 16.4% of small businesses in DMO regions are on standing offers. The AER lists two common ways of ending up on one: you have never moved to a market offer, or you moved into a home and have been using power from the existing retailer without contacting one.

In Victoria the ESC adds a few more: you cancelled a contract during cooling-off and kept using electricity, or your market contract came to an end and you were moved across.

Your bill or your retailer will tell you which type of plan you have.

When the default offer is the better deal

Both regulators say the same thing about their own price: it will not necessarily be the lowest available to you. It is set to be fair, not to be the sharpest offer in the market.

Still, an old market plan can drift above it. If that has happened to you, the AER says you can ask your retailer to move you to the standing offer and the retailer is required to do it. In Victoria, retailers must make the VDO available to customers who ask for it, and information about the VDO has to appear on the front page of every electricity bill.

For most households the better move is to use the reference price as a starting line and look for a market offer below it. Compare plans for your address or go straight to the government tools, Energy Made Easy (1300 585 165) and, in Victoria, Victorian Energy Compare. Have a recent bill next to you so you can enter your real usage. Our bill explainer shows where to find the numbers, and the switching guide covers cooling-off and exit fees.

If a retailer gets it wrong

The ACCC enforces the Electricity Retail Code in NSW, South Australia and south-east Queensland and carries out regular compliance checks. It does not resolve individual disputes. If an ad or a quote seems to misstate the comparison, raise it with the retailer first, then with your state’s energy ombudsman, which is free: EWON in NSW (1800 246 545), EWOQ in Queensland (1800 662 837), EWOSA in South Australia (1800 665 565) and EWOV in Victoria (1800 500 509). You can also report the problem to the ACCC.

The next reset is due on 1 July 2027. For 2026-27 the AER released its draft in March and its final decision in late May, and we track the known dates in our 2027 price outlook.