First identify what the percentage refers to
The ACCC describes the AER comparison price, also called the Default Market Offer, as a benchmark for comparing electricity offers in NSW, south-east Queensland and South Australia. A larger percentage below the same benchmark usually indicates a cheaper offer for the benchmark consumption. This comparison is useful; it is not meaningless advertising. But it does not substitute your household’s consumption for the benchmark’s. [1]
Before using percentages side by side, match the area, customer and tariff type, date and conditions. A percentage for one reference household cannot simply be carried to another. Also distinguish a percentage below the comparison price from a conditional discount that requires a particular payment behaviour.
The policy context should not be mistaken for an immediate bill change. On 18 September 2026, the AER announced draft DMO guidelines and invited submissions by 16 October. The consultation concerns the methodology intended for the 2027–28 determination. It is not a September announcement that a particular household’s tariff has fallen. [2]
A higher fixed cost can buy a lower unit price
Consider three invented plans, all in AUD with GST already included. Plan A has a supply charge of $1.20 a day and a usage rate of 28 cents per kWh. Plan B charges 80 cents a day and 32 cents per kWh. Plan C charges $1 a day and 30 cents per kWh. There are no credits, concessions, memberships, fees or discounts to add.
For a 365-day comparison, A’s supply component is $438, B’s is $292 and C’s is $365. Every extra kWh then adds the stated usage price. We deliberately keep the inputs plain so the point where the plans change order is visible.
| Annual imports | Plan A: $1.20/day +28c/kWh | Plan B: $0.80/day +32c/kWh | Plan C: $1/day +30c/kWh |
|---|---|---|---|
| 2,000 kWh | $998 | $932 | $965 |
| 4,000 kWh | $1,558 | $1,572 | $1,565 |
| 6,000 kWh | $2,118 | $2,212 | $2,165 |
At 2,000 kWh, Plan B’s lower daily charge matters more than its higher unit price. At 6,000 kWh, Plan A’s cheaper units outweigh its larger fixed component. That reversal comes entirely from arithmetic, without an unusual household or an obscure fee.
A costs $146 more per year in supply charges than B, but saves 4 cents per kWh. Dividing $146 by $0.04 gives a crossover at 3,650 kWh. At that usage all three invented plans cost $1,460. A household expecting to sit near that point would see only a small price difference under these particular assumptions.
Why the advertised order can differ from yours
To connect the calculation with percentages, invent a benchmark annual bill of $1,800 at 4,000 kWh. This is not the official DMO for any network. At that consumption A is 13.44% below the invented benchmark, B is 12.67% below and C is 13.06% below, rounded to two decimals.
A has the biggest benchmark discount in this model. Yet the 2,000 kWh household pays $66 less on B. The percentages were consistent with their assumed consumption; the household had a different consumption basket. This is the precise reason to combine the headline comparison with your own usage, rather than dismissing the percentage or treating it as a guaranteed personal saving.
For time-of-use plans, annual kWh alone is insufficient. A fictional household importing 1,000 kWh at 50 cents and 3,000 kWh at 20 cents incurs $1,100 in usage charges. Reversing those quantities produces $1,700, despite identical total consumption. Supply charges would be added separately. A plan with additional demand or controlled-load charges needs those components too; the simple three-plan table cannot model them.
Compare your existing contract deliberately
Energy Made Easy is the Australian Government comparison service for NSW, Queensland, South Australia, Tasmania and the ACT. Its inputs include postcode and energy-usage information. [3] That geographical coverage should not be confused with the narrower jurisdictions of the DMO benchmark discussed above.
EME explicitly says it does not display your current plan or current rates. It displays available plans, including offers from your existing retailer. Its guidance therefore tells readers to use their own bill when comparing existing prices, including checking GST treatment and the relevant usage bands. [4]
The practical consequence is easy to miss: seeing your retailer’s name in results does not establish that the result describes your present contract. Record the plan identifier and date, then put its rates next to the rates actually billed. If the retailer offers to move you internally, confirm which plan and conditions will apply.
For an ordinary NSW address comparison, fix the postcode, distribution area and meter/tariff arrangement before entering consumption. A postcode is a starting input, not proof that every displayed offer suits every meter or account. Confirm eligibility with the retailer before treating a comparison result as a contract.
Put conditions into dollars and dates
A joining credit is different from a permanently lower rate. In another fictional example, a $100 credit makes a $1,600 first-year charge appear to be $1,500, provided the credit is actually earned and received. If everything else stays identical but the credit does not repeat, the second year costs $1,600. An annualised headline should not turn a one-off benefit into an indefinite saving.
The same discipline applies to payment conditions. Record the ordinary charge, the benefit when the condition is met and the outcome if it is not. The ACCC notes that conditional discounts can depend on paying on time or by Direct Debit. [1] Do not subtract the percentage a second time if the displayed estimate already includes it.
Solar households need a further separation: imports create charges, while eligible exports may earn credits under the contract. A high feed-in rate alone cannot establish the lower net bill. Use import and export quantities separately, and identify any caps or eligibility conditions in the offer rather than borrowing assumptions from a neighbouring home.
The documents that make a comparison usable
- A bill showing the current plan, charged days, usage and tax treatment.
- A representative usage period, with time bands where required.
- The new offer’s plan identifier, network area, meter requirements and start date.
- Supply, usage and any additional charges, each in consistent units.
- Credits and concessions listed separately, with eligibility and expiry.
- A second-year calculation when a first-year benefit disappears.
Save both the estimate and the terms used to build it. If the rates change later, that record explains why the next bill differs from the comparison. The useful outcome is a total that can be reconstructed for your consumption and conditions, rather than a percentage remembered from an advertisement.
Read the underlying guidance.
- Electricity prices and plansAustralian Competition and Consumer Commission · checked 2026-09-28. Comparison-price scope and conditional discounts.
- AER invites feedback on the draft DMO guidelinesAustralian Energy Regulator · checked 2026-09-28. 18 September2026 draft consultation; 16 October2026 deadline; intended2027–28 method, not a current bill reduction.
- Energy Made EasyAustralian Energy Regulator / Energy Made Easy · checked 2026-09-28. Official comparison service, supported jurisdictions and usage inputs.
- How do I compare my current plan rates on EME?Energy Made Easy · checked 2026-09-28. Current plan/rates not automatically displayed; bill-based GST and tariff comparison.
Source and arithmetic checks by the producing AI, followed by a separate AI editorial review. Human English editing and subject-specialist review have not been completed. Human Australian energy-specialist and English-editor review; actual postcode/network offers not collected and no supplier recommendation made.
