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Electricity price safety nets are set to fall for the first time in six years across several Australian regions from July 1, with some households projected to save up to $229 on their annual bills.
The Australian Energy Regulator (AER) has confirmed average benchmark pricing reductions ranging between 3.4 per cent and 7.7 per cent across New South Wales regions, and between 7.2 per cent and 10.7 per cent in Southeast Queensland.
South Australia is the exception. Depending on tariff type, customers there will see either an increase of 1.4 per cent or a fall of up to 1.1 per cent.
Full details are available on the AER’s website.
Victoria also seeing reductions
The AER’s confirmation follows an earlier decision by the Essential Services Commission that prices will drop an average of 5 per cent in Victorian Default Offer regions. Residential households on the VDO could potentially save up to $84 per year.
Default offers were designed as a safety net to protect customers who did not actively seek out cheaper plans, and to discourage retailers from charging excessive prices to those who stayed on existing arrangements. They also serve as a reference point for consumers comparing plans across different retailers.
Welcome relief but not the full picture
David Koch, Economic Director at Compare the Market, described the reductions as a significant positive for households already under financial pressure from higher fuel prices and mortgage interest rates.
“This is obviously great news for bill payers in many parts of the country – any relief is welcome,” Koch remarked.
However, he cautioned that the benchmark standing offer plans subject to the reductions are not the cheapest options available, and that consumers who simply accept the new default pricing could still be paying more than necessary.
“But if you’re on a benchmark standing offer plan, you’re already paying more than you need to. It is the ‘safety net’ plan, but they’re certainly not the best deals,” he continued.
“Putting in ten minutes of legwork and running a comparison while you’re on the train to work or sitting in front of the telly could help you stretch those savings even further.”
South Australia a different story
Koch also flagged that the adjustments were not uniformly positive across the country, with South Australian customers facing potential price increases rather than reductions.
“It is also worth noting some adjustments were not as generous as regulators initially projected, and prices will in fact go up instead of down in South Australia – so again, the onus is on us to try to secure bigger discounts,” he noted.
Loyalty tax still in play
The case for actively comparing plans remains strong according to Compare the Market’s data. Koch pointed to figures showing that customers who remain with the same retailer for three or more years pay $221 more annually than those who switch to new plans.
“That’s not exactly loose change when we’re also facing higher mortgage rates, rising grocery costs and surging fuel prices,” Koch observed. “Standing offers will change on 1 July, but they’re rarely the cheapest deal on the market. Customers still need to shop around if they want real savings.”
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Flow-on effects expected
The new benchmark pricing is also expected to trigger changes across the broader market as retailers adjust their competitive offers in response.
“The decision will also set in motion pricing changes across other market offers. Depending on the retailer, we could see some great deals come online, while others might become less attractive,” Koch explained.
“That’s why it’s crucial that people with the power to switch use this opportunity to make sure they’re still on a good deal. Circle 1 July in your calendar and see if you could save – one quick check could return hundreds to your pocket.”
What the default offer means
Default offers, sometimes referred to as standing offers, function as a regulated price cap rather than a discounted rate. They exist to ensure consumers who do not engage with the energy market are not charged excessively, but they sit above the market rates available to customers who actively compare and switch providers.
The July 1 changes will reset these benchmarks, but the gap between the default rate and the cheapest available market offers is expected to remain substantial.
Last Updated on May 26, 2026 by Nick Ross
