Electricity Prices for Small Businesses Are Changing from 1 July 2025: What You Need to Know

From 1 July 2025, electricity prices for small businesses on standing offers will rise across New South Wales, South East Queensland, South Australia and Victoria. These changes reflect updated Default Market Offer (DMO) and Victorian Default Offer (VDO) rates set by energy regulators. 

If your business hasn’t signed a competitive market electricity contract, you’re likely on one of these default offers—and these changes will directly impact your energy costs. 

What Are the DMO and VDO?

• DMO: A price cap set by the Australian Energy Regulator (AER) for small businesses in NSW, SE QLD and SA. 
• VDO: The Essential Services Commission (ESC) sets this in Victoria as a fair, simple electricity price for small businesses on standing offers. 

Both are designed to protect businesses that haven’t entered into a market contract and act as a reference point for comparing energy plans. 

What’s Changing for Small Businesses?

The AER’s final determination for DMO 2025–26 shows: 

In a draft ruling still under consultation, the AEMC is also proposing that retailers highlight better offer messages more clearly—not just on the bill itself, but also in cover emails and bill summaries. 

Why Are Prices Increasing?

Several rising cost components are contributing to the new DMO prices: 

• Retail costs: Increased by up to 35%, largely due to rising bad debts, smart meter upgrades, and customer acquisition expenses. 
• Wholesale energy costs: Increased 1.5% to 10%, depending on region, due to higher contract and spot market prices. 
• Network charges: Now make up 33% to 48% of bills, with some regions (like Endeavour Energy in NSW) seeing increases over 11%. 
• Environmental costs: These actually decreased across all regions, helping soften the overall impact. 

Despite these pressures, the AER has again chosen not to apply a competition allowance to default prices in 2025–26, citing ongoing cost-of-living concerns. 

What About the VDO for Victorian Small Businesses?

While final figures for 2025–26 have not been publicly confirmed at the time of writing, draft guidance suggests a moderate increase of around 2% to 5% in line with rising retailer and wholesale costs. 

The VDO is based strictly on efficient costs and does not include any margin for retailer competition, making it a fair benchmark—but not always the cheapest. 

What Can Your Business Do?

Compare your current rate to the DMO or VDO: These are reference prices and give you a good benchmark. 

• Explore market offers: Businesses on standing offers are often paying more than necessary. There may be better value in the market. 
• Check your eligibility for rebates or support: Visit energy.gov.au/rebates to see what your business might qualify for. 

Final Thought

With energy costs rising, this is a good time to assess your current plan. Even a small percentage saving can add up over a year—especially for businesses with high usage. 

Need help reviewing your electricity contracts or exploring tender options? We’re here to help. 

Need Help Reviewing Your Energy Plan?

If you’re not sure whether your business is on the best available energy plan—or haven’t checked in a while—we can help. 

Our team can review your current rates, compare available offers, and assist with switching to a better deal if needed. 

Contact us today to see how much you could save. 

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Leading Edge Energy can help you secure stable, competitive rates so energy price spikes don’t affect your bottom line. 

Let’s chat. Call us at 1300-852-770 or email us at info@leadingedgeenergy.com.au. 

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