Comparing electricity retailers is more confusing than it needs to be, and that confusion serves the retailers. Varying rate structures, conditional discounts, daily supply charges, and time-of-use tariffs make it hard to do a straightforward cost comparison. This article explains the framework you need: what the standing offer and reference price actually mean, how to read a market offer, and how to calculate which retailer will cost less for your household's actual usage.
The standing offer is the default tariff a retailer charges customers who have not actively chosen a market offer. It is the price you pay if you have never switched, if you moved into a property and were automatically assigned to the previous occupant's retailer, or if a fixed-term market offer expired and you did not act. Standing offers are required to comply with a regulated reference price — but complying with the reference price does not mean you are getting a good deal. It means you are at the regulated ceiling.
The Default Market Offer (DMO), set annually by the Australian Energy Regulator (AER) for NSW, SE Queensland, and SA, and the Victorian Default Offer (VDO) in Victoria, serve as reference points for comparison. Retailers must show on energy bills how their current pricing compares to the DMO/VDO as a percentage. A bill showing "30% below reference price" means the retailer is pricing below the DMO cap for your usage profile.
The AER sets DMO reference prices by network area and usage profile. For a reference customer using approximately 3,900–4,000 kWh per year, the 2025-26 figures are:
| Region | DMO/VDO reference price (annual) |
|---|---|
| NSW (Ausgrid network) | ~$1,905 |
| NSW (Endeavour network) | ~$2,100 |
| NSW (Essential Energy) | ~$2,490 |
| SE Queensland | ~$2,177 |
| South Australia | ~$2,280 |
| Victoria (VDO) | ~$1,675 |
These figures are annual estimates for a reference usage profile. Your actual bill depends on your consumption and location. The AER publishes network-specific figures at aer.gov.au. Source: AER Default Market Offer Determination 2025-26.
The DMO 8 determination, applying from 1 July 2026, will reduce reference prices in NSW and SE Queensland and increase them in South Australia, reflecting changes in wholesale market costs and network charges. If you are comparing offers near the July changeover, check the incoming DMO 8 figures.
Most market offers advertise a discount — "30% off usage rates" or "25% below reference price." The critical distinction is whether the discount is off the usage rate, the total bill, or the reference price. These produce different savings:
A "25% off usage rates" offer from a retailer whose base rates are already above average may produce less saving than a "15% off" offer from a retailer whose underlying rates are lower. The percentage headline means nothing without knowing what it is a percentage of. The only valid comparison is estimated annual cost for your actual usage volume, using each retailer's current rates.
Energy Made Easy (energymadeeasy.gov.au), operated by the AER, allows you to enter your usage details and compare estimated annual costs across all retailers in your distribution area. This is the right tool for an apples-to-apples comparison — not comparison sites that earn referral commissions on retailer sign-ups.
Every electricity bill has two components: the daily supply charge (a fixed daily fee regardless of usage, typically 80c to $1.40 per day) and the usage rate (cents per kWh consumed). Low-usage households should pay particular attention to the supply charge — a retailer offering a very low usage rate but a high daily supply charge can end up more expensive for someone using under 5 kWh per day. High-usage households are more sensitive to usage rates and less sensitive to supply charges.
When comparing retailers, always calculate total annual cost as: (daily supply charge x 365) + (usage rate x annual kWh). That figure is what actually comes out of your account.
Some distribution networks offer time-of-use (TOU) tariffs where the per-kWh rate varies by time of day: peak (typically 3pm–9pm weekdays), shoulder, and off-peak. These can produce significant savings for households that can shift usage to off-peak periods — running the dishwasher overnight, charging an EV off-peak, or using hot water systems on controlled load. For households with no flexibility in usage timing, a flat rate often produces a lower bill than TOU because peak rates can be 50–80% higher than the flat equivalent.
Check your current tariff type on your bill — it will say "flat rate," "time of use," or "flexible pricing." If you have solar, TOU tariffs can interact with your feed-in tariff in ways that affect the overall value proposition.
If you have rooftop solar, the feed-in tariff (FiT) your retailer pays for exported energy is a material part of the comparison. Current FiT rates in most states range from approximately 3c to 8c per kWh, significantly lower than the 44c–60c rates that applied under early state-government solar bonus schemes (most of which have now ended). Some retailers offer higher FiT rates but offset this with higher usage rates or supply charges. Evaluate the net position across both import and export, not just the FiT headline.
Gas comparison follows the same standing offer / market offer / reference price structure, though fewer households in eastern Australia are now adding gas connections. If you have existing gas heating, hot water, or cooking, running the same comparison through Energy Made Easy applies. Gas prices in southeast Australia have risen substantially since 2022, making the comparison more financially significant.
Energy market offers change regularly. A deal that was competitive 18 months ago may not be now. The AER recommends comparing at least annually, and definitely before the end of any fixed-benefit period on your current contract. Most market offers allow you to exit without a fee even within the contract term — the exit fee was banned for residential customers under the National Energy Retail Law. You can switch at any time without penalty.
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