Breaking News: DMO and VDO predictions point to a mixed bag for energy prices

Words by Zembl

After two solid years of retail energy prices climbing off the chart, in news just in as the AER releases its draft for the impending Default Market Offer (DMO) reset on 1 July, we’re finally beginning to see signs that relief could be on the horizon, but not by much, and not for everyone. According to the draft:


The majority of residential customers in NSW, SA and parts of QLD could see price reductions of between 0.4% - 7.1%. The remainder may see increases between 0.9% - 2.7%, depending on their region and whether they have controlled load.

Most small business customers in the same states could see reductions between 0.3% - 9.7% (quite a range) while others could face modest increases of around 0.7%, depending on their region.


The Victorian equivalent of the DMO is the VDO (Victorian Default Offer) and the draft predicts the reset could slash about 6.4% from residential bills and 7% for small businesses from July 1.

Tempered optimism

“I wouldn’t be popping the champagne corks just yet,” said Gavin Duffy, the manager of policy and research at St Vincent de Paul, to ABC News on Tuesday 19 March.

“The wholesale price is coming down and the DMO (Default Market Offer) is reflecting that. We’re talking about, on average, around about 2 to 3 percent down in real terms on what people will be paying,” he said, adding “but this is much better than last year which was just all up.”

Duffy also said that even though few people will be markedly affected by the default market offer, it sent an important message to the rest of the market about where prices are headed.

Highs and lows

Also talking to ABC News, Chair of the Australian Energy Regulator (AER) Clare Savage flagged that some, not all consumers are set to win when the DMO officially re-sets on 1 July, with increases of up to 2.7% for households in South East Queensland and 0.9% for those in rural New South Wales on the table.

She also pointed out that wholesale electricity prices are not the only force impacting the final retail price, and that costs in other parts of the electricity system are going up. Key among these was the poles-and-wires network, which typically accounts for the biggest share of an electricity invoice. She also cited rising interest rates, inflation and investment needed for energy transition as factors of increasing costs, all putting pressure on pricing in the opposite direction of down.

How to keep your rates competitive in any market

For more than 14 years, Zembl has been saving businesses money on their energy bills by helping them buy better in the Australian energy market and improve their business bottom lines. Our work keeps us intimately acquainted with the NEM (National Energy Market) and all its twists and turns, and this July’s DMO reset is no exception.

If you’re worried if you’re paying more than you should be for business energy today, there’s one way to alleviate your concern – book a free energy bill comparison with a Zembl Energy Expert. They can not only compare your current pricing with what’s available, if they find you a saving they’ll do the legwork to switch you on the spot – if you approve of course!

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