The Default Market Offer, or DMO, is a regulated maximum price set each year by the Australian Energy Regulator for customers on standing offers in NSW, south-east Queensland and South Australia. Victoria has its own equivalent, the Victorian Default Offer or VDO, set by the state’s Essential Services Commission. Both do the same two jobs.
First, they protect people who never shop around by capping what a retailer can charge on a standing offer. Second (and this is the part most people miss), they create a common "reference price" that retailers must advertise their market offers against, so different plans can be compared on a single yardstick.
Why "X% below reference price" matters
Before the reference price existed, retailers advertised huge "discounts" off their own inflated made-up rates, which meant nothing: 40% off an invented high price could still be dearer than a plainly priced plan. The reference price fixed the base of the comparison so a discount is measured against a regulated, independent number instead of the retailer’s own inflated figure.
So a plan advertised as "12% below the reference price" is telling you it is 12% cheaper than the regulated benchmark at a set usage level, in your network zone. That is genuinely more meaningful than the old discounts, and it lets you rank offers quickly.
Where the benchmark falls short
The reference price is built on a benchmark household using a fixed amount of electricity in a given network zone, with no solar. If your usage, your usage pattern or your solar export differs from that benchmark (and almost everyone’s does), the advertised percentage will not translate into the same percentage on your actual bill.
The percentage also compares a plan against the regulator’s cap, not against the best plan on the market. Two plans can both be "below the reference price" while one is meaningfully cheaper than the other for you. And a plan with a great headline percentage but punishing peak rates or a high supply charge can still lose to a plainer plan once your real usage is applied.
How to actually use it
Treat the reference-price percentage as a first-pass filter, not a verdict. It quickly tells you which plans are in the right ballpark.
Check the plan is being compared for your own network zone; a percentage quoted for a different zone does not apply to you.
Look past the percentage to the underlying rates: the usage charge, the daily supply charge, any time-of-use periods and the feed-in tariff if you have solar.
Cost the shortlisted plans against your real usage (from your own bill or meter data) rather than the benchmark household; our guide to understanding your electricity bill shows where to find those figures.
The DMO is a regulated maximum price set annually by the Australian Energy Regulator for standing-offer customers in NSW, south-east Queensland and South Australia. It also serves as the reference price retailers compare their market offers against.
What is the difference between the DMO and the VDO?
The DMO is the national regulator’s benchmark used in NSW, south-east Queensland and SA. The VDO is Victoria’s own version, set by the Essential Services Commission. They play the same role but are set by different bodies.
Does "10% below the reference price" mean my bill drops 10%?
Not necessarily. The reference price is based on a benchmark household and a set usage level. If your usage or solar differs, the saving on your actual bill will differ from the advertised percentage.
Is a bigger percentage below the reference price always better?
No. The percentage compares a plan to the regulated cap, not to the best plan available, and it can hide punishing peak rates or high supply charges. Only costing plans against your real usage reveals the true cheapest.
How should I use the reference price when comparing?
Use it as a quick filter to spot plans in the right ballpark, then compare the underlying rates and cost the shortlist against your own usage rather than the benchmark household. A whole-of-market comparison does that arithmetic for you.
Which states does the DMO apply in?
The DMO applies in NSW, south-east Queensland and South Australia. Each state sets its own network charges underneath the same benchmark, so the reference price differs by zone.
Does the DMO or VDO apply in Victoria?
Victoria uses its own version, the Victorian Default Offer, set by the state's Essential Services Commission rather than the national regulator. Our guide to electricity prices in Victoria explains how the VDO changes the way you compare.
Is there a reference price in WA or Tasmania?
No. Neither runs a competitive household retail market the way the DMO states do, and both rely on regulated tariffs instead, so there is no reference-price percentage to compare against.
When does the reference price change each year?
The regulator resets the DMO annually, with new prices generally taking effect from 1 July. That is why it is worth reviewing your plan around mid-year, when new rates and offers land.
Does Energy Made Easy use the reference price too?
Yes, the government site shows offers against the reference price, but it relies on the figures you enter and does not cost plans on your full usage data. See how the approaches differ in EnergySorted vs Energy Made Easy.
General information only, current at the time of writing. Not financial advice. Rebate schemes and rules
change; always confirm details with your retailer or state government energy site.
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