Are you overpaying for power? Probably — but not for the reason the ads say.
The DMO and VDO are a government price safety net — a maximum-price reference, not the cheapest deal. If you’re on a standing offer or a plan priced above that reference, you’re likely overpaying. But the honest catch is that comparison-site “save $X” and “big discount” headlines are often measured off an inflated base rate. The real move: read the actual cents-per-kWh and daily supply charge, not the discount. Checking is free, quick and doesn’t interrupt your supply.
Reviewed by the Mission Green Energy Team · Updated July 2026
Are you overpaying
for electricity?
Short answer: if you’ve never switched, or you’re on a standing offer, probably yes — and it costs nothing to find out.
The Default Market Offer (DMO) and the Victorian Default Offer (VDO) are a government price safety net, not a good deal. They cap what a retailer can charge on a ‘standing offer’ — the default plan you land on if you never actively chose one — and they act as a reference price that every other market offer is measured against. Because they’re a ceiling rather than a target, most competitive market plans sit well below them.
So if you’re still on a standing offer, or on a plan priced above the reference, you’re very likely paying more than you need to. The honest catch: don’t chase the biggest advertised discount, because a large percentage off an inflated base rate can still cost more than a small percentage off a low one. Read the actual cents-per-kWh usage rate and daily supply charge instead. A useful tell is on your own bill — retailers must tell you on the front page, at least every 100 days, if they can offer you a better deal.
What the DMO and VDO
actually are.
Two different safety nets, set by two different regulators, reset on roughly the same day each year.
The DMO (AER)
The Default Market Offer is set by the Australian Energy Regulator for households and small businesses in New South Wales, South East Queensland and South Australia. It’s the price cap on standing offers, and the reference price all other market offers in those regions are compared to.
The VDO (ESC)
In Victoria the DMO doesn’t apply. Instead the Essential Services Commission sets the Victorian Default Offer — the maximum a retailer can charge on a standing offer, and the comparison price for judging other plans.
Updated ~1 July
Both are reset each year, taking effect around 1 July. Prices move up or down by state, network and household, so any single figure you read has a shelf life — always confirm the current number at the source.
‘Discount off what?’
The headline that hides the rate.
A ‘30% off’ sticker means nothing until you know 30% off what number.
Here’s the tactic worth naming. A retailer can advertise a big discount — ‘save 30%’ — measured off its own inflated base rate or standing-offer rate. A rival advertising a smaller ‘10% off’ a genuinely low base can easily be the cheaper plan. The percentage is only as honest as the number it’s taken from, and that number is usually not on the ad.
This is exactly why the reference price exists. Retailers must state how their offer compares to it — for example ‘15% below the reference price’. That gives you one common yardstick across every plan. So compare the reference-price percentage, then verify with the two numbers that actually build your bill: the cents-per-kWh usage rate and the daily supply charge. If your plan is a time-of-use one, the usage rate isn’t a single figure — see time-of-use vs flat vs demand tariffs explained before you compare.
How to tell if you’re
actually overpaying.
You don’t need a spreadsheet — you need your last bill and the free government tool.
The free, independent government comparison tools are the honest starting point, because they aren’t paid by retailers to rank them. Energy Made Easy, run by the AER, covers NSW, Queensland, South Australia, Tasmania and the ACT, and takes less than three minutes. Victorian Energy Compare, run by the Victorian Government, includes every generally available electricity, gas and solar tariff in the state.
To use them well: grab your latest bill, enter your actual usage (or your address so it estimates for your area), and read the results as your plan versus the reference price and versus the market. Watch the two levers — the usage rate and the daily supply charge — not the headline discount. If you’ve seen your bill jump and you have solar, it may not even be your plan; why your power bill went up after solar covers the other culprits.
Find your rates
On your bill, locate your c/kWh usage rate(s) and your daily supply charge. These two numbers decide almost everything — not the discount banner.
Run the free tool
Enter them into Energy Made Easy or Victorian Energy Compare. See where you sit against the reference price and the cheaper plans available now.
Compare like for like
Judge each option on its reference-price percentage and its real rates. A smaller discount off a lower base can beat a bigger discount off an inflated one.
If you have solar,
compare two numbers, not one.
Chasing the highest headline feed-in tariff is the classic solar mistake.
Solar changes the comparison. A plan can dangle a high feed-in tariff (what you’re paid for exported power) while quietly carrying a high usage rate (what you pay for power you buy). Chase the biggest headline feed-in number and you can easily end up worse off overall, because most households still import more than they export — especially in the evening.
The honest move is to compare the usage rate and the feed-in tariff together, weighted to how much power you actually import versus export. Note too that in Victoria there is no longer a minimum solar feed-in tariff set by the regulator, so the number is entirely up to the retailer — another reason to read the whole plan, not the sticker. If your feed-in has shrunk to near zero, the real question shifts to self-consumption; is solar worth it when feed-in tariffs are near zero? unpacks that, and is solar worth it in 2026 covers the bigger picture.
Switching is free,
fast and doesn’t cut your power.
The part that stops most people is the part that barely exists.
The biggest reason people overpay isn’t the maths — it’s the fear that switching is a hassle or that the lights will flicker off. Neither is true. When you choose a new plan, your new retailer handles the change; there’s no interruption to your supply and no one comes to your home. In Victoria, people who used the government comparison tool across 2025 saved on average $170 by switching (the latest published figure), and the change typically completes within days.
A couple of honest caveats. If you signed a fixed-benefit or fixed-term plan there may be conditions or exit terms — check before you switch, though many market offers have no exit fee. And do the check periodically, not once: because the reference price resets each 1 July and retailers reprice, today’s good deal can drift. Set a yearly reminder around July to run the free tool again.
So — are you
overpaying, and what now?
Here’s the call we’d give a friend, in order.
If you’ve never switched or you’re on a standing offer, assume you’re overpaying and check today — this is the group most likely to be paying the safety-net price rather than a competitive one. If you switched a while ago, check anyway: the reference price resets each 1 July and deals drift, so a plan that was sharp two years ago may not be now. When you compare, ignore the big discount banner and read the reference-price percentage plus the actual c/kWh usage rate and daily supply charge. If you have solar, weigh the usage rate and feed-in tariff together against your real import/export split — never chase the highest headline feed-in alone. Use the free, independent government tools — Energy Made Easy or Victorian Energy Compare — not a commercial site that’s paid to rank retailers. Switching is free, quick and won’t interrupt your power. Because prices vary by state and reset yearly, confirm the current figures at the source before you decide.
The default offer
— your questions, answered.
No. The Default Market Offer (DMO) is a government price safety net set by the Australian Energy Regulator for households and small businesses on standing offers in New South Wales, South East Queensland and South Australia. It also acts as a reference price that other market offers are compared against. Because it is a maximum-price cap rather than a competitive deal, most market offers sit below it. So if you are on a standing offer at the DMO, you are likely overpaying compared with the cheaper plans available. Retailers must also tell you on the front page of your bill, at least every 100 days, if they can offer you a better deal, which is a strong signal to check.
They are two versions of the same idea set by different regulators. The Default Market Offer (DMO) is set by the Australian Energy Regulator and applies in New South Wales, South East Queensland and South Australia. In Victoria the DMO does not apply; instead the Essential Services Commission sets the Victorian Default Offer (VDO), which is the maximum price a retailer can charge on a standing offer and a comparison price for judging other plans. Both are reset each year, taking effect around 1 July. Neither applies in Western Australia or the Northern Territory, which are outside the National Electricity Market and use separate arrangements.
Because a discount is only meaningful once you know what it is measured against. A retailer can advertise a large percentage off an inflated base rate or standing-offer rate, and that can still cost more than a smaller discount off a genuinely low base rate. The honest way to compare is to look at how each offer compares to the reference price as a percentage, then check the two numbers that actually build your bill: the cents-per-kWh usage rate and the daily supply charge. Retailers are required to state their offer against the reference price, which gives you one common yardstick across every plan rather than a marketing headline.
Use the free, independent government comparison tools with your latest bill in hand. Energy Made Easy, run by the Australian Energy Regulator, covers New South Wales, Queensland, South Australia, Tasmania and the ACT and takes less than three minutes. Victorian Energy Compare, run by the Victorian Government, includes every generally available electricity, gas and solar tariff in the state. Enter your actual usage rate and daily supply charge, then see where your plan sits against the reference price and the cheaper plans on offer. Focus on the usage rate and daily supply charge rather than the headline discount, because those two numbers decide most of your bill.
Compare the usage rate and the feed-in tariff together, not the feed-in tariff alone. A plan can advertise a high feed-in tariff, which is what you are paid for exported power, while carrying a high usage rate for the power you buy. Because most households still import more than they export, chasing the highest headline feed-in tariff can leave you worse off overall. Weight both numbers to how much power you actually import versus export. Note that Victoria no longer sets a minimum solar feed-in tariff, so the figure is up to the retailer. The free government comparison tools include solar tariffs and can model the whole plan for you.
No. Switching is free and quick, and there is no interruption to your supply. Once you choose a new plan the new retailer handles the change, and no one needs to visit your home. In Victoria, people who used the government comparison tool across 2025 saved on average $170 by switching (the latest published figure), and the change typically completes within days. Check for any conditions on a fixed-benefit or fixed-term plan before you switch, although many market offers have no exit fee. Because the reference price resets each 1 July and retailers reprice, it is worth running the free comparison tool again around July each year rather than only once.
Where these figures come from.
Prices and percentages vary by state, network and household and reset each 1 July — confirm the current figures at the source before you decide.