Electricity Prices NSW

Prices of Electricity Set to Increase by up to 9.7% in NSW

In a recent news release, the Australian Energy Regulator (AER), who is responsible for capping what electricity retailers can charge, revealed that residential customers on current electricity plans could experience an increase of up to 9.7% in NSW in the 2025-26 financial year.

As a part of their determination, AER Chair Ms Clare Savage mentioned the difficulty of the decision along with ongoing pressures of the DMO (Default Market Offer) since the last determination back in 2024.

“We know this is not welcome news for consumers in the current cost-of-living environment. As noted in our draft determination, sustained pressures across almost all components of the DMO have driven these price rises, with wholesale and network costs rising in most jurisdictions between 1% and 11%, and retail costs between 8% and 35% compared with last year.

“Since the draft determination we have used our compulsory information gathering powers to further scrutinise retail costs and refined part of this component of the DMO as a result,” Ms Savage said on Monday.

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Australian Energy

What is the Default Market Offer (DMO)?

The Default Market Offer (DMO) is essentially a ‘safety net’ that help protect customers for unreasonably high electricity prices. It is the highest price that a provider can charge on current plans for households and small businesses in NSW, QLD, and South Australia. This does not include customers on demand tariffs or small businesses on flex or TOU tariffs.

The Australian Energy Regulator is responsible for determining the DMO prices every year, which works as a reference price for customers who want to compare electricity plans between retailers.

The DMO price is typically not the cheapest offer throughout the energy market, as most retailers have better deals for customer savings.

Why are Energy Prices Increasing in NSW? 

According to the AER, it said that the upcoming price increases were a result of rising costs surrounding the various components like wholesale energy and networks costs that make up the DMO.

Final DMO 7 prices reveal that compared to DMO 6, NSW households without a controlled load will see electricity prices increase by 8.5% to 9.1%. Customer with controlled load will see prices increase by 8.3% to 9.7%.

Small businesses in NSW will also be affected with increases of 7.9% to 8.5%. QLD and South Australia are also seeing prices increases, but not nearly as high as New South Wales.

Retail costs were reported as lesser contributors to market drivers, which consisted of elements like growing costs reported by retailers, debts, implementation of smart meters, and in some cases, increased marketing costs to attract new customers.

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Australian Energy

Market Comparison Recommendation

Ms Savage also reiterated that there are better available offers that are under the DMO price, in which retails are legally required to support customers.

“While the DMO protects consumers on standing offers that can’t or don’t engage in the market, as of this month 90% to 95% of competitive market offers are below the current DMO price. On average, the lowest offers across DMO regions are between 18% and 27% cheaper.

“I strongly encourage all consumers to avoid staying on an old or uncompetitive plan. Contact your retailer to see if you can get a better offer or shop around. At least every 100 days your retailer must tell you on the front page of your bill if they can offer you a better deal."

How Much are Electricity Bills Increasing By?

According to the data table provided by the AER, the new average residential electricity bill YoY increase (without controlled load) is around $1,965, an 8.6% increase from $1,810 for Ausgrid, and $2741, a 9.1% increase from $2513 for Essential Energy.