The Australian Energy Regulator (AER) has published its final decision for the 2024–25 Default Market Offer.

DMO 6 sets electricity price caps for South Australia, New South Wales, and South East Queensland - aiming to protect household and small business customers on standard retail plans from excessive charges.

The AER says it has reviewed stakeholder feedback and updated various cost factors including wholesale, network, environmental scheme, and retail costs, alongside the latest inflation forecasts. 

Electricity affordability continues to be a major concern for households facing rising living costs. Consequently, the AER has emphasised consumer protection in its final decision.

A key change in the final determination is the adjusted approach to calculating the retail allowance, which ensures a fair profit margin for retailers but excludes an additional competition allowance. 

As a result, prices for most customers will see only slight variations from the draft figures.

From 1 July 2024, residential customers can expect price reductions of 1 per cent to 6 per cent, though some might experience increases between 2 per cent and 4 per cent based on their region and controlled load usage. 

Small business customers could see reductions of 1 per cent to 9 per cent, with potential minor increases of around 1 per cent depending on the region.

AER Chair Clare Savage noted significant changes in wholesale and network costs since the 2023–24 DMO 5 release. 

Wholesale energy costs have decreased substantially - by approximately 21 per cent in South Australia and 7 per cent to 11 per cent in NSW - while South East Queensland saw a modest 0.2 per cent reduction.

Factors driving network price increases include adjustments for previous revenue under-recovery, updated capital and operating costs, inflation and interest rate rises, incentive payments, jurisdictional schemes, and specific contributions for NSW networks.

Additional retail cost increases stem from managing bad and doubtful debts and expanding smart metre rollout. 

As a result, prices are decreasing in NSW and South Australia but increasing in South East Queensland.

The Queensland and Australian governments have announced financial assistance for electricity bills, which will more than offset any increases. 

Some households may also receive additional support from state government schemes. 

“We know and understand that cost-of-living pressures are front of mind for many households and small businesses, and we will continue to protect customers from unjustifiably high prices," AER chair Clare Savage said.

“If you’re struggling to pay your bills, contact your retailer as soon as possible because under national energy laws they must assist you. Your retailer is also required to tell you on the front page of your bill, at least every 100 days, if they can offer you a better deal. Most retailers have cheaper deals than the standing offer, so shopping around remains the best way to get the best price,” Ms Savage added.

The final decision indicates that while prices will decrease slightly for households in NSW and South Australia, they will rise in parts of Queensland. 

Victoria's Essential Services Commission also announced price reductions, cutting the state's default offers by 6 per cent for households and 7 per cent for small businesses, equating to annual savings of $100 for residential customers and $260 for small businesses.