BREAKING NEWS! Electricity price hikes coming in July: What households need to know

Electricity prices are set to rise in just over a month, with households facing potential increases of up to $228 for the 2025-26 financial year.

From July 1, power bills for customers on default plans in New South Wales, Southeast Queensland, and South Australia will experience increases between $71 and $228, depending on the region and electricity network they’re connected to.

These price hikes are a result of the Australian Energy Regulator (AER) finalising the Default Market Offer (DMO) and setting the price benchmarks for the coming year.

How will the price increases affect different states?

In New South Wales, Southeast Queensland, and South Australia, consumers on default plans without controlled load arrangements will bear the brunt of the price hikes.

In some areas, increases could reach up to 9.1%, pushing the average annual bill higher. For many households, this will add extra pressure to an already stretched cost of living.

Meanwhile, in Victoria, consumers will see a more moderate increase. The Essential Services Commission (ESC) has set the new rates, with an average increase of 1% across the state’s five electricity zones. This translates to around an extra $20 a year for the typical Victorian household.

While this is a smaller increase compared to other states, the rise still reflects ongoing pressure from wholesale costs and network maintenance.

What is driving the price hikes?

The rise in electricity prices is largely driven by increases in wholesale electricity costs and network charges. Wholesale electricity costs, which reflect what retailers pay to purchase power from the market, have seen upward pressure, particularly during high demand periods.

The cost of maintaining and upgrading the electricity grid continues to rise, contributing to higher network charges.

Retail operating costs, such as call centre operations, billing systems, customer acquisition, and the management of defaults and unpaid bills, are also driving price increases.

This means that while wholesale and network costs make up a significant portion of the hike, the operational costs for retailers play a substantial role.

What are default market offers (DMO) and Victorian default offers (VDO)?

The Default Market Offer (DMO) in New South Wales, Southeast Queensland, and South Australia, and the Victorian Default Offer (VDO), are the maximum prices that electricity retailers can charge customers on default contracts.

These offers are designed to protect customers who either don’t shop around for a better deal or aren’t able to change their plan for various reasons. The DMO and VDO include both a daily supply charge (the cost of being connected to the grid) and a consumption rate (the price per kilowatt hour of electricity).

While most customers (around 92%) are on market offers, these default prices act as a reference point for comparing plans. Retailers often align their market offer prices with the default prices, meaning many consumers will see a rise in their rates even if they are not directly on default contracts.

Final DMO prices

The Australian Energy Regulator (AER) has finalised the Default Market Offer (DMO) pricing for the upcoming financial year, outlining the expected electricity costs for households across various regions.

These prices, which apply to residential properties without controlled load arrangements, are based on the average energy consumption determined by the regulator.

It's important to note that actual costs may vary depending on the specific electricity network a household is connected to.

Final VDO prices

Victoria’s Essential Services Commission (ESC) has finalised the electricity prices for the 2025-26 financial year, with changes ranging from a decrease of $26 to an increase of $90, depending on the electricity zone.

These adjustments are based on an average annual usage of 4,000 kWh for domestic customers, using flat tariff rates.

The ESC has confirmed that the average price increase across the state’s five electricity networks is 1%, which translates to an additional $20 per year for the typical household.

What can households do to minimise the impact?

This is a good time for customers to review their current electricity plan with Compare Energy and see if there are better options available.

Switching electricity plans now could provide immediate savings, and consumers can reassess their options later in the year once the full impact of the price hikes becomes clear. 

Key steps for households:

1. Review your current plan: Check your electricity bill or contact your provider to see if your rates are changing.
2. Switch now or wait: If you're not on a lock-in contract, switching now could help reduce immediate costs, and you can always revisit your plan after the price hikes settle.
3. Consider hardship options: If you're struggling to pay your electricity bill, contact your provider as soon as possible to explore payment plans or hardship programs that could ease the burden.

The bigger picture: rising bills and financial pressure

For many Australian households, electricity price hikes are just one part of the wider cost-of-living challenges. With rising wholesale electricity prices, increased network maintenance costs, and higher retail operating expenses, the upcoming price increases are likely to add further pressure.

The financial strain will be felt particularly by families and individuals already struggling with high living costs.

Electricity providers are required to offer hardship programs, so if you’re already behind on your payments, don’t hesitate to reach out and ask for support.

While the federal government’s energy rebate program may provide some relief, it is expected to end soon. As prices continue to rise, households need to be proactive in managing their energy costs, whether through switching providers, exploring payment options, or taking advantage of government assistance where possible.

Take action today to lower your electricity costs.

With price hikes on the horizon, now is the perfect time to explore cheaper plans and potentially save hundreds of dollars a year.

Contact Compare Energy today on 1300 790 106 to discuss your options and switch to a more affordable plan before the costs go up. Don’t wait; make the change now and ease the financial pressure ahead.