Energy bills are among the most resented line items in the Australian household budget, partly because they are large, and partly because almost nobody understands them. Between usage charges, supply charges, time-of-use windows, controlled load tariffs, conditional discounts, and government reference prices, the average electricity bill is harder to read than most mobile phone contracts.
This guide cuts through it. Below you will find typical annual electricity and gas bills for each state and territory in 2026, an explanation of the two price safety nets (the Default Market Offer and the Victorian Default Offer), a breakdown of what actually drives your bill, and a practical process for comparing plans that can realistically save a typical household a few hundred dollars a year.
For a deeper dive into electricity specifically, including solar, batteries, and concessions, see our guide to electricity prices in Australia. To see how energy fits into your whole budget, try the cost of living calculator.
Typical Annual Electricity Bills by State in 2026
The figures below are indicative annual costs for a typical household without solar, consuming roughly 4,000 to 5,000 kilowatt hours (kWh) per year. Actual bills vary widely with household size, heating type, insulation, appliances, and the plan you are on.
| State / Territory | Typical Annual Electricity Bill |
|---|---|
| South Australia | $2,000 - $2,600 |
| New South Wales | $1,800 - $2,200 |
| Queensland (south-east) | $1,700 - $2,200 |
| Tasmania | $1,700 - $2,100 |
| Victoria | $1,600 - $2,100 |
| ACT | $1,600 - $2,000 |
| Northern Territory | $1,600 - $2,000 |
| Western Australia | $1,500 - $1,900 |
In unit terms, residential usage rates in the eastern states typically sit between roughly 28 and 38 cents per kWh, plus a daily supply charge of around $0.90 to $1.50 just for being connected. That supply charge alone is $330 to $550 per year before you switch on a single light, which is why low-consumption households (such as single-person apartments) pay far more per kWh used than the headline rate suggests.
Why the spread between states?
- South Australia has long had the highest retail prices in the country, a legacy of its early coal exits, gas-heavy generation, and long transmission distances, although its world-leading rooftop solar uptake offsets this for many households.
- Western Australia and the NT are not part of the National Electricity Market (NEM). Prices are regulated by the state and territory governments, which has kept them comparatively stable.
- Tasmania has largely hydro-powered, regulated pricing, but cold winters push consumption up, so annual bills end up mid-pack despite moderate unit rates.
- Victoria enjoys relatively competitive retail pricing, but many households pair electricity with substantial gas heating, so total energy costs are higher than the electricity column alone suggests.
Typical Annual Gas Bills by State in 2026
Gas is a very different story from electricity because usage varies so dramatically. A household with gas cooking only might use a few gigajoules a year; a Melbourne home with ducted gas heating can use ten times as much.
As a national guide, households connected to natural gas typically pay around $100 to $250 per quarter, or roughly $400 to $1,000 per year. Within that, indicative annual ranges look like this:
| Usage Pattern | Typical Annual Gas Bill |
|---|---|
| Cooking only | $250 - $450 |
| Cooking + hot water | $450 - $800 |
| Cooking + hot water + space heating (temperate states) | $700 - $1,100 |
| Ducted gas heating household (Victoria, ACT, Tasmania) | $1,000 - $1,800+ |
Some notes by region:
- Victoria is Australia’s gas heartland: around four in five Victorian homes are connected, and winter heating drives bills. Winter quarters of $300 to $600 are common in homes with ducted gas heating, even where the annual average looks moderate.
- New South Wales and South Australia have significant gas networks, but usage per household is generally lower than Victoria, so annual bills typically land in the middle of the ranges above.
- Queensland has low residential gas penetration; many households have no gas connection at all, and those that do often use it for cooking and hot water only.
- Western Australia has widespread gas use and comparatively competitive regulated pricing.
- Tasmania and the ACT have smaller networks; the ACT is actively encouraging electrification and winding back new gas connections.
Like electricity, gas bills include a daily supply charge, often $0.60 to $0.90 per day. If you are only using gas for a cooktop, that supply charge can be half your bill, which is why a growing number of households are disconnecting gas entirely and going all-electric. Just be aware that abolishing a gas connection can involve a one-off fee, and reconnecting later costs more.
The Default Market Offer and Victorian Default Offer Explained
Australia’s two energy price safety nets confuse a lot of people, so here is the short version.
The Default Market Offer (DMO)
The DMO is set each year by the Australian Energy Regulator (AER) and applies in New South Wales, South Australia, and south-east Queensland. It does two things:
- It caps the price of standing offers, the default plans customers land on when they have never shopped around or when a market plan expires.
- It acts as a reference price. Every retailer in DMO regions must advertise its market plans as a percentage above or below the reference price, so you can compare “12 per cent below the reference price” with “5 per cent below” directly, instead of untangling different discount structures.
The AER publishes new DMO prices every year, taking effect on 1 July. The crucial thing to understand is that the DMO is a safety net, not a good deal. Competitive market offers routinely sit well below the reference price. If your bill says you are on a standing offer, you are almost certainly paying more than you need to.
The Victorian Default Offer (VDO)
Victoria runs its own equivalent, the VDO, set by the state’s Essential Services Commission rather than the AER. It serves the same two purposes: a price cap on default plans and a comparison benchmark. Victorian retailers must express discounts relative to the VDO.
Everywhere Else
Regional Queensland, Western Australia, the Northern Territory, Tasmania, and the ACT have regulated or government-set retail prices with limited or no retail competition for most households. In those markets, comparing plans matters less because there is often only one price, although Tasmania and the ACT do have some choice of retailer.
Gas has no DMO equivalent, which makes shopping around on gas both harder and arguably more important, since lazy gas pricing goes unchecked by a published benchmark.
What Actually Drives Your Bill
Your energy bill is built from a handful of components, and knowing them tells you where the savings are.
- Usage charges (cents per kWh for electricity, cents per megajoule for gas) are the part you control through consumption and plan choice.
- Daily supply charges are fixed. You cannot reduce them by using less, only by choosing a plan with a lower supply charge, or in the case of gas, deciding whether the connection is worth keeping at all.
- Tariff structure matters. Flat-rate plans charge the same at all hours. Time-of-use plans charge a premium in the evening peak (often 4 pm to 9 pm) and much less overnight and in the middle of the day. Households that can shift dishwashing, laundry, hot water heating, and EV charging away from the peak can do well on time-of-use; households that cannot are often better off flat.
- Heating and cooling dominate consumption. Air conditioning in summer and heating in winter are the biggest swing factors in most homes. A reverse-cycle air conditioner used heavily can add $150 to $300 per month in the peak season, while an efficient heat pump used moderately is among the cheapest heating available per unit of warmth.
- Hot water is the quiet giant. Water heating is commonly the second-largest energy use in a home. Electric storage hot water on a controlled load (off-peak) tariff, or a heat pump hot water system, is substantially cheaper to run than a standard electric element on the general tariff.
How to Compare Plans and Actually Save
Switching energy plans is the highest-return hour of admin most households can do. Savings of $200 to $500 per year are common for households that have not reviewed their plan in a couple of years. Here is the process.
Step 1: Get your usage data. Grab a recent bill, or better, download 12 months of usage. Your bill shows your consumption in kWh (and MJ for gas) per billing period. With a smart meter, your retailer or distributor can provide interval data.
Step 2: Use the official comparison sites, not commercial ones. The federal government’s Energy Made Easy website covers NSW, Queensland, SA, Tasmania, and the ACT, and Victorian Energy Compare covers Victoria. Both are run by government, list every generally available plan, and let you upload or enter your actual usage so the ranking reflects your household, not a hypothetical one. Commercial comparison sites typically rank only the retailers that pay them commissions.
Step 3: Compare against the reference price. In DMO and VDO regions, the percentage below the reference price is the quickest like-for-like signal. The cheapest plans for typical households are usually well below the reference price.
Step 4: Check the details that erode savings. Conditional discounts (pay-on-time, direct debit) that you might miss. High supply charges hidden under low usage rates, which punish low-consumption homes. Benefit periods that expire after 12 months, quietly rolling you onto a worse rate. Exit fees are rare now but worth a glance.
Step 5: Switch, then diarise a review. Switching is free, handled entirely by the new retailer, involves no interruption to supply, and typically completes within days. Set a reminder to re-run the comparison every 12 months, because retailer pricing strategies rely on customer inertia.
Step 6: Do gas separately. Bundling electricity and gas with one retailer is convenient but frequently not the cheapest combination. Compare each fuel on its own merits.
If you are in a regulated market (WA, NT, regional Queensland), your lever is not switching but tariff choice and consumption: ask your retailer whether a time-of-use or controlled load tariff suits your pattern.
Concessions, Rebates and Hardship Support
Every state and territory runs energy concessions for eligible concession card holders, typically worth a few hundred dollars per year, and the federal government has in recent years applied direct bill rebates as cost-of-living relief. Examples include the NSW Low Income Household Rebate, the Victorian Annual Electricity Concession, Queensland’s electricity rebates, and SA’s energy concessions. Eligibility and amounts change with budgets, so check your state revenue or concessions website and make sure any rebate you are entitled to is actually showing on your bill.
If you are struggling to pay, contact your retailer before the bill falls overdue. Retailers are required to offer hardship programs with payment plans, and disconnection is a last resort with strict rules around it. The AER and state ombudsman schemes oversee these protections, and the energy ombudsman in your state is free to contact if a dispute goes nowhere.
Cutting the Bill Without Freezing in the Dark
Beyond switching plans, the big structural savings in 2026 are:
- Rooftop solar, which remains the single most powerful bill reducer for owner-occupiers with suitable roofs. A common 6.6 kW system costs roughly $5,000 to $9,000 installed after the federal small-scale rebate and can cut $800 to $1,500 or more from annual bills, with the best results coming from using the solar yourself rather than exporting it at feed-in rates of only a few cents per kWh.
- Electrifying gas appliances at end of life. When a gas heater or hot water system dies, replacing it with a reverse-cycle air conditioner or heat pump hot water system usually lowers running costs, and if it is your last gas appliance, it also eliminates the gas supply charge entirely.
- Efficiency basics: draught sealing, ceiling insulation, washing in cold water, heating the room you are in rather than the whole house, and setting air conditioning to 24 to 25 degrees in summer. Unglamorous, but collectively worth hundreds per year in many homes.
Several states also run efficiency upgrade schemes (such as Victorian Energy Upgrades) offering discounted efficient appliances, and solar and battery subsidies vary by state. Check your state government energy department’s website for what is current.
How Energy Compares With Your Other Bills
For a typical household, combined electricity and gas runs somewhere between $1,800 and $3,200 per year in 2026, with all-electric homes at the lower end in most states and gas-heated Victorian homes at the upper end. That is comparable to a year of average internet and mobile plans plus water, and well below the big three of housing, food, and transport. Our cost of living calculator bundles energy into a weekly utilities estimate for each capital city if you want to see the whole picture, and our guides to the cost of living in Australia in 2026 and grocery costs cover the rest of the budget.
Frequently Asked Questions
Why did my bill jump when my usage did not?
The most common causes: a benefit period expired and your plan reverted to higher rates, your retailer repriced at its annual review (usually 1 July, following DMO and VDO changes), a seasonal time-of-use pattern kicked in, or an estimated read corrected to an actual read. Compare the unit rates on your last two bills line by line; the answer is almost always there.
Is the Default Market Offer the cheapest price?
No, the opposite. It is a ceiling for default plans and a comparison benchmark. Competitive market offers are routinely cheaper than the reference price, which is why checking Energy Made Easy or Victorian Energy Compare is worthwhile even if your current plan sounds fine.
Should I disconnect my gas?
If gas is only running a cooktop, the daily supply charge means you may be paying a large fixed cost for a small service, and an induction cooktop plus disconnection often wins financially over time. If gas runs your heating and hot water, electrification is best done as appliances reach end of life rather than all at once. Factor in any abolishment fee and the capital cost of replacement appliances.
Do smart meters cost me more?
The meter itself is typically free or recovered through tariffs, and it unlocks time-of-use plans, accurate (non-estimated) bills, and better usage data. The caution is that some retailers move customers to time-of-use tariffs after a smart meter install; if your consumption is concentrated in the evening peak, check whether a flat tariff remains available to you.
Are bill-smoothing plans worth it?
Paying a fixed fortnightly amount smooths cash flow but is based on estimated annual usage, trued up later. It is a budgeting tool, not a saving. Make sure the underlying rates are competitive before smoothing them.
Key Takeaways
- Typical annual electricity bills in 2026 range from roughly $1,500 in WA to $2,600 at the top end in South Australia; gas adds anywhere from $250 for cooking-only homes to $1,800 or more for gas-heated Victorian houses.
- The DMO (NSW, SA, south-east Queensland) and VDO (Victoria) are price safety nets and comparison benchmarks set by the AER and the Essential Services Commission; standing offers priced at these levels are beatable, usually by a wide margin.
- Use the government comparison sites, Energy Made Easy and Victorian Energy Compare, with your actual usage data; $200 to $500 per year in savings is realistic for households that have not switched recently.
- Supply charges, tariff structure, heating and cooling, and hot water drive most of the bill; plan choice and load shifting are the fastest levers, solar and electrification the biggest structural ones.
- Check your state’s energy concessions if you hold a concession card, and talk to your retailer early if you are struggling, since hardship protections are strong but not automatic.
Disclaimer: This article is general information only, not financial advice. Energy prices, default offer levels, rebates, and concession amounts change regularly and vary by distribution zone, retailer, and tariff. All figures are indicative 2026 ranges. Check current prices on Energy Made Easy or Victorian Energy Compare, confirm concessions with your state government, and read any plan’s fact sheet before switching.