EXPLANATORY STATEMENT
Competition and Consumer (Industry Code—Electricity Retail) (Model Annual Usage, Comparison Prices and Tariff Caps) Determination 2026
Issued by authority of the Australian Energy Regulator
1. Authority
The Australian Energy Regulator (the AER) has made the Competition and Consumer (Industry Code—Electricity Retail) (Model Annual Usage, Comparison Prices and Tariff Caps) Determination 2026 (the Determination) under Part 3 of the Competition and Consumer (Industry Code—Electricity Retail) Regulations 2019 as amended by the Competition and Consumer (Industry Code—Electricity Retail) Amendment Regulations 2026 on 1 July 2026 (the Regulations).[1]
The Regulations prescribe a mandatory industry code for the purposes of Part IVB of the Competition and Consumer Act 2010 (the CCA).
2. Purpose and operation
The Default Market Offer (the DMO) is an annual price cap for standing offers in New South Wales, South East Queensland and South Australia. Standing offers are default electricity plans that protect households and small businesses who do not switch to a more competitive plan. The DMO is also the comparison price for competitive market offers.
In March 2026 the Australian Government implemented reforms to the DMO framework which commence on 1 July 2026.[2]
The objective of the Regulations is to provide small customers that are supplied with electricity at standing offer prices with a fair, trusted and reasonably priced electricity option that reflects the costs of supplying small customers with an essential service.[3]
The Regulations provide for the AER to determine regulated tariff types, model annual usage, comparison prices for both regulated and non-regulated tariffs, and the applicable Solar Sharer Offer (SSO) free usage period and reasonable use tariff cap.
This is the first DMO determination made by the AER under the amendments to commence on 1 July 2026 but the eighth DMO determination published by the AER.
3. Consultation
The Regulations set out requirements that the AER must follow before making a determination under section 16 of the Regulations.[4]
The AER’s consultation process included:
- Publishing an Issues Paper on 5 November 2025. The AER received 27 responding submissions.
- Holding workshops on 17 November 2025 with groups of retailers.
- Holding bilateral meetings during late January to early February 2026 with retailers, network businesses and consumer groups on the SSO.
- Publishing a draft determination on 19 March 2026. The AER received 22 responding submissions.
- Holding workshops on 27 March 2026 with groups of retailers to discuss the draft determination.
Consultation documents, public submissions and the AER’s final determination are available on the AER's website DMO 8 page.
4. Disallowance
The Determination is a legislative instrument for the purposes of the Legislation Act 2003.
By operation of subsection 44AH(3) of the CCA, section 42 (disallowance) of the Legislation Act 2003 does not apply to the Determination.
5. Details
Details of the Determination are set out in Attachment A.
6. Statement of Compatibility with Human Rights
The Determination is compatible with the human rights and freedoms recognised or declared under section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. A full statement of compatibility is set out in Attachment B.
Attachment A
Details of the Competition and Consumer (Industry Code—Electricity Retail) (Model Annual Usage, Comparison Prices and Tariff Caps) Determination 2026
Section 1 – Name
This section sets out that the title of the Determination is the Competition and Consumer (Industry Code—Electricity Retail) (Model Annual Usage, Comparison Prices and Tariff Caps) Determination 2026.
Section 2 – Commencement
This section provides that the Determination commences on 1 July 2026.
Section 3 – Authority
This section provides that the Determination is made under subsections 16(1), 16(1A), 18(1) and 18(4) of the Competition and Consumer (Industry Code – Electricity Retail) Regulations 2019 as amended by the Competition and Consumer (Industry Code—Electricity Retail) Amendment Regulations 2026, and subsection 4(2) of the Acts Interpretation Act 1901 as applied by paragraph 13(1)(a) of the Legislation Act 2003.
Section 4 – Definitions
This section provides the definitions of key terms used in the Determination.
Section 5 – Per-customer annual usage determination
This section sets out the AER’s determination of the per-customer amount of electricity supplied in specified distribution regions to small customers of the types listed and for regulated and non-regulated tariffs in accordance with subparagraphs 16(1)(a)(i) and 16(1A)(a)(i) of the Regulations.
Section 6 – Timing or pattern of supply determination
This section sets out the AER’s determination of the timing or pattern of supply of electricity in specified distribution regions to small customers in accordance with subparagraphs 16(1)(a)(ii) and 16(1A)(a)(ii) of the Regulations.
Section 7 – Per-customer annual price determination for non-regulated tariff(s)
This section sets out the AER’s determination of what it considers the reasonable per-customer annual price in relation to supplying electricity under a non-regulated tariff in accordance with paragraph 16(1)(b) of the Regulations.
Section 8 – Per-customer comparison annual price determination for regulated tariffs
This section sets out the AER’s determination of what it considers the reasonable per-customer annual price for supplying electricity under a regulated tariff of that type in specified distribution regions to small customers of that type in accordance with paragraph 16(1A)(b) of the Regulations.
Section 9 – Tariff cap price determination for regulated tariffs
The section sets out the AER’s determination of a tariff cap that is a maximum amount of fixed charge and variable charges or charges that an electricity retailer may charge small customers of that type in that distribution region in the year for supplying electricity under a regulated tariff of that type in accordance with paragraph 16(1A)(c) of the Regulations.
- Subsection 1 sets out the AER determined residential customer flat rate tariff cap for supplying electricity in a specified distribution region.
- Subsection 2 sets out the AER determined small business customer flat rate tariff cap for supplying electricity in a specified distribution region.
- Subsection 3 sets out the AER determined residential customer time of use tariff cap for supplying electricity in a specified distribution region.
- Subsection 4 sets out the AER determined small business customer time of use tariff cap for supplying electricity in a specified distribution region.
- Subsection 5 sets out the AER determined residential customer controlled load tariff cap for supplying electricity in a specified distribution region.
- Subsection 6 sets out the AER determined residential customer SSO regulated tariff for supplying electricity in a specified distribution region.
Section 10 – Free Usage period for SSO regulated tariffs
This section sets out the AER’s determination of a free usage period as part of the tariff structure of an SSO regulated tariff in a distribution region in accordance with subsection 18(1) of the Regulations.
Section 11 – Reasonable Use Tariff Cap for SSO regulated tariffs
This section sets out the AER’s determination of a reasonable use tariff cap for the excess electricity in accordance with subsection 18(4) of the Regulations.
Attachment B
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Competition and Consumer (Industry Code—Electricity Retail) (Model Annual Usage, Comparison Prices and Tariff Caps) Determination 2026
This Legislative Instrument is compatible with the human rights and freedom recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
The Default Market Offer (the DMO) is an annual price cap for standing offers in New South Wales, South East Queensland and South Australia. Standing offers are default electricity plans that protect households and small businesses who do not switch to a more competitive plan. The DMO is also the comparison price for competitive market offers.
In March 2026 the Australian Government implemented reforms to the DMO framework which commence on 1 July 2026.[5]
The objective of the Competition and Consumer (Industry Code—Electricity Retail) Regulations 2019 as amended by the Competition and Consumer (Industry Code—Electricity Retail) Amendment Regulations 2026 on 1 July 2026 (the Regulations) is to provide small customers that are supplied with electricity at standing offer prices with a fair, trusted and reasonably priced electricity option that reflects the costs of supplying small customers with an essential service.[6]
The Regulations provide for the Australian Energy Regulator (the AER) to determine regulated tariff types, model annual usage, comparison prices for both regulated and non-regulated tariffs, and the applicable Solar Sharer Offer (SSO) free usage period and reasonable use tariff cap.
This is the first DMO determination made by the AER under the amendments to commence on 1 July 2026 but the eighth DMO determination published by the AER.
This Legislative Instrument sets out the AER’s determinations under Part 3 of the Regulations. Specifically:
- Section 5 sets out the AER’s per-customer annual usage determination
- Section 6 sets out the AER’s timing or pattern of supply determination
- Section 7 sets out the AER’s per-customer annual price determination for non-regulated tariff(s)
- Section 8 sets out the AER’s per-customer comparison annual price determination for regulated tariffs
- Section 9 sets out the AER’s tariff cap price determination for regulated tariffs
- Section 10 sets out the AER’s free usage period for SSO regulated tariffs
- Section 11 sets out the AER’s reasonable use tariff cap for SSO regulated tariffs
The Legislative Instrument commences on 1 July 2026.
Human rights implications
The Legislative Instrument is prepared under the Regulations.
The Regulations promotes the right to an adequate standard of living.
The electricity retailers that are subject to the Regulations are mainly expected to be bodies corporate, which do not have human rights. To the extent that it is possible that an individual may be captured by the Regulations, they engage the right to a fair trial and presumption of innocence.
Conclusion
This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
[1] Subsection 4(2) of the Acts Interpretation Act 1901 (as applied by paragraph 13(1)(a) of the Legislation Act 2003) allows the making of instruments, including the Determination, in anticipation of the commencement of the Competition and Consumer (Industry Code—Electricity Retail) Amendment Regulations 2026.
[2] Competition and Consumer (Industry Code—Electricity Retail) Amendment Regulations 2026.
[3] Regulations, s. 9A.
[4] Regulations, s. 17.
[5] Competition and Consumer (Industry Code—Electricity Retail) Amendment Regulations 2026.
[6] Regulations, s. 9A.