The Default Market Offer, or DMO, is a basic electricity price set by the government. It started on 1 July 2019. The DMO stops energy retailers from charging too much if you’re on a default electricity plan, also known as a standing offer. Some people are on a standing offer because they haven’t picked a new plan or their old plan ended. The DMO protects these customers by setting a price cap.
Why the DMO Matters
The DMO gives people a fair price for electricity. It also acts as a guide when comparing other plans. When retailers advertise, they must show how their plans compare to the DMO. This helps you see how much more or less you’ll pay.
In some states, like New South Wales, South East Queensland, and South Australia, there are no government price rules for market offers. That’s where the DMO steps in. It becomes both a price limit and a comparison point.
Why the DMO Was Introduced
Before the Default Market Offer existed, energy retailers could set standing offer prices with little regulation. This meant some customers paid much more than others. The DMO was created to prevent this. It gives a limit to what can be charged when no market deal is in place, keeping prices in check for anyone who hasn’t chosen a plan.
Who Sets the DMO?
The Australian Energy Regulator (AER) decides the DMO price each year. They look at factors like how much it costs to make and deliver electricity. They then set the price for the next 12 months, starting every 1 July.
DMO 2025 will apply from 1 July 2025 to 30 June 2026.
How Retailers Must Display DMO Comparisons
Retailers must compare their market offers to the DMO when advertising. This makes it easier for customers to see how much more or less they might pay compared to the default rate. Every price shown must clearly say how it stacks up against the Default Market Offer in that region. This rule applies in New South Wales, South East Queensland, and South Australia.
Where the DMO Applies
The DMO is used in:
- New South Wales
- South East Queensland
- South Australia
It covers small homes and businesses. If you’re in one of these areas and don’t choose a specific market deal, you’ll likely be on the DMO price.
What’s in the DMO Price
Your power bill includes two parts:
- A daily supply charge: this is a fixed cost you pay every day
- A usage charge: this is based on how much electricity you use
The DMO sets a limit on both parts. The prices can change depending on where you live and which energy company delivers your power.
Using the DMO to Compare Plans
Retailers must show how their market plans compare to the DMO. You might see something like “12% less than the DMO” on an energy deal. That means the plan costs less than the government’s default price. Plans that cost more than the DMO are not allowed for standing offers. This makes it easier for customers to see which plans are better value.
What Happens When a Deal Ends
When your market deal ends, your retailer might move you to a standing offer. In DMO states, that means your price switches to the DMO. Some people don’t notice the change until their next bill. That’s why it helps to stay on top of your plan’s expiry date. Move-in Connect helps by keeping track and showing you better options before your price changes.
What’s Changing with DMO 2025
The AER updates the DMO every year. For DMO 2025, they’ll look at electricity prices, supply costs, and how much energy people use. These updates begin from 1 July 2025. Retailers will update their standing offer prices to match. Your bill might go up or down, depending on where you live and how the new rates are set.
What to Do About the DMO
The DMO is helpful. It gives you a fair starting point. But market offers are often cheaper. They may also include other benefits.
Move-in Connect helps people:
- Check current plans against the DMO
- Find cheaper deals
- Set up the switch
Understanding the Role of DMO
The Default Market Offer is there to protect you from paying too much for electricity. It makes it easier to understand your bills and compare other offers. If you’re not sure which plan you’re on, check your latest bill. Then see how it compares to the DMO. Move-in Connect can help you switch to a better deal with less hassle.
