The Default market offer (DMO) came into effect on 1 July 2019.
The DMO is an electricity price ‘safety net’ protecting consumers from unjustifiably high prices, while also allowing retailers to recover costs. It is the maximum price an electricity retailer can charge standing offer customers.
The DMO price for each region also acts as a ‘reference price’ for residential and small business offers in that area. When advertising or promoting offer pricing, retailers must show the price of their offer in comparison to the DMO/reference price. This assists customers when comparing the price of different offers.
The Competition and Consumer (Industry Code – Electricity Retail) Regulations 2019 sets out the legislative framework for the DMO.
The AER’s role is to determine DMO prices annually. This is the seventh time we will determine DMO prices. As such we refer to the DMO for 2025–26 as ‘DMO 7’.
Our DMO price determination applies to residential and small business customers in New South Wales, south-east Queensland and South Australia.
Issues paper
On 11 October 2024 we released the issues paper for DMO 7. As part of the consultation process, we hosted 2 in-person retailer workshops, held one-on-one meetings with several stakeholders and on 14 November 2024 presented to the AER’s Customer Consultative Group to discuss topics raised in the issues paper. 15 written submissions were received.
Draft determination
On 13 March 2025 the AER released the DMO 7 draft determination. Stakeholders are invited to provide submissions responding to the draft determination by COB, Thursday, 3 April 2025.
ACIL Allen supported the AER in the design of a forecasting approach for wholesale and environmental costs. The report Wholesale energy and environment cost estimates for DMO 7 draft determination by ACIL Allen was published alongside the draft determination on 13 March 2025.
We also requested ACIL Allen produce a long run marginal cost (LRMC) estimate for South Australia to provide a comparative data point against our current forecasting approach for wholesale costs. The report LRMC estimates for South Australia by ACIL Allen was also published alongside the draft determination on 13 March 2025.