When an electricity plan is advertised as "12% less than the reference price", that reference price is not a marketing invention. It is a benchmark set by a government regulator, refreshed every year, and it is one of the most useful yardsticks you have for judging whether a plan is competitive.
Standing offers and market offers
First, the two kinds of plan. A standing offer is the default contract you land on if you have never chosen a plan, or if your market contract lapsed and you did nothing. A market offer is a plan you actively choose, and market offers are usually cheaper than standing offers.
The regulators' default prices exist to cap what standing-offer customers pay, and to give everyone else a common benchmark.
The Default Market Offer (DMO)
The Default Market Offer is set each year by the Australian Energy Regulator (AER) and applies in New South Wales, south east Queensland and South Australia. It does two jobs:
- It caps the total annual price retailers can charge standing-offer customers in those regions.
- It doubles as the reference price: when retailers in those regions advertise a discount, they must express it against the DMO for your network area, so a "15% less than the reference price" claim from one retailer is directly comparable with another's.
The DMO is expressed as an annual bill for a typical customer on a flat rate with a set usage level, which differs by network area. Your own bill will differ with your usage; it is a benchmark, not a quote.
The AER's final DMO for 2026-27 took effect on 1 July 2026. Residential prices (without controlled load) fell in most regions: in New South Wales the reductions ranged from about 3.4% to 5.0% depending on network area, with the Ausgrid (Sydney) benchmark at $1,899 a year. In south east Queensland the Energex-area benchmark fell 7.2% to $1,988. South Australia was the one region with an increase, up 1.4% to $2,334. The current figures for every network area are on the AER's DMO page.
The Victorian Default Offer (VDO)
Victoria runs its own system. The Victorian Default Offer is set by the Essential Services Commission, Victoria's independent energy regulator, and works the same way in spirit: it is the regulated price you pay if you have never chosen a market offer, and a benchmark for comparing plans. The Commission published its final VDO decision for 2026-27 on 25 May 2026, and the new tariffs also took effect on 1 July 2026. Details are on the Essential Services Commission's VDO page.
Victorian bills must also show a best offer message at least every 3 months, telling you whether your retailer has a cheaper plan for you. The government's own comparison site, Victorian Energy Compare, is built around the same idea.
What about everywhere else?
Outside the DMO and VDO regions, prices are regulated differently. In regional Queensland, household prices are notified prices overseen by the Queensland Competition Authority. Tasmanian standing offer prices are regulated through the Office of the Tasmanian Economic Regulator, and the ACT's through the Independent Competition and Regulatory Commission. In Western Australia and the Northern Territory, household prices are effectively set by each government: most WA households buy from Synergy or Horizon Power at State-set prices, and most NT households from Jacana Energy at government-set tariffs, so there is no reference-price shopping to do.
How to actually use the reference price
The reference price is a yardstick, not an answer. Two plans both advertised as "10% less than the reference price" can cost you different amounts, because the discount is measured against a benchmark usage profile rather than your home's actual usage. A plan with a low usage rate and a high supply charge suits a big household; the reverse suits a low-usage apartment.
So use it in two steps:
- Use the advertised percentage against the reference price to shortlist plans that are in the right neighbourhood.
- Then do the whole-bill maths with your own usage: supply charge plus usage rate times your kWh, for each plan.
Step two is exactly what our free calculator does. Enter your usage once and it ranks plans by what they would really cost you per day, month and year, and in QLD, NSW, VIC, SA, TAS and the ACT you can import real plans for your postcode from government data. No ads, no signup.
If you have not compared since before 1 July, the 2026-27 reset is a good reason to spend ten minutes checking: the benchmark moved in your favour almost everywhere, and retailers reprice around it.