Australian electricity contracts come in two forms: standing offers (the default regulated tariff) and market offers (competitive plans with varying rates, discounts, and conditions). Market offers often look cheaper due to headline discount percentages, but conditional discounts (pay on time, direct debit, online billing) mean the advertised rate only applies if you meet every condition. Miss a payment deadline by a day and you could lose the entire discount for that billing period. Since the introduction of the Default Market Offer (DMO) and Victorian Default Offer (VDO) as price caps, comparing plans has become somewhat easier — but the terms and conditions of market offers still require careful reading.
What is a Market vs Standing Offer Terms?
An electricity supply contract is an agreement between a consumer and an electricity retailer for the supply of electricity to a residential or business premises. Standing offers are regulated default tariffs that must be available to all customers — they have no fixed term, no exit fees, and prices are set by the AER (Default Market Offer) or the ESC in Victoria (Victorian Default Offer). Market offers are competitive contracts with negotiated rates, discounts, and conditions — they may have fixed terms (1-2 years), benefit periods, conditional discounts, and exit fees. The National Energy Retail Law and the National Energy Retail Rules govern these contracts in most states (not VIC or WA, which have their own frameworks).
Red flags to watch for
A 25% 'guaranteed discount' that requires direct debit, email billing, and on-time payment is not guaranteed at all. Missing any condition means paying the much higher base rate for that billing cycle.
Many market offers have a 'benefit period' after which the rates revert to the standing offer (often significantly higher). If you do not actively switch or renegotiate, you end up on the most expensive tariff.
While exit fees are less common since the ACCC's Retail Electricity Pricing Inquiry recommendations, some plans still impose fees of $20-$150 for early exit. This discourages switching to a better deal.
If you have solar panels, the feed-in tariff (payment for electricity you export to the grid) varies enormously between retailers. A cheap supply rate with a very low feed-in rate could cost you more overall.
Some market offers use demand tariffs (charging based on your peak usage in a billing period) which can result in much higher bills for households with high peak demand. If you do not understand the tariff structure, you cannot compare plans accurately.
Some plans include GreenPower or carbon offset charges as a default add-on, increasing the bill. These should be an opt-in choice, not a default you have to actively remove.
Your legal rights
The National Energy Retail Law and National Energy Retail Rules (applying in NSW, QLD, SA, TAS, and ACT) require retailers to: provide clear disclosure of all terms before you enter a contract; honour the agreed tariff for the benefit period; give at least 5 business days' notice before a price change; allow you to switch retailers without a fee on standing offers; and comply with the AER's Default Market Offer as a price cap for standing offers. Victoria's Energy Retail Code (administered by the Essential Services Commission) provides equivalent protections and sets the Victorian Default Offer. The ACCC monitors the electricity market and has enforcement powers against misleading pricing. The Australian Energy Regulator (AER) publishes the Energy Made Easy comparison tool. Complaints can be lodged with state energy ombudsman schemes (EWON in NSW, EWOV in Victoria, EWOQ in Queensland, EWOSA in SA).
Questions to ask before you sign
- 1Is this a market offer or a standing offer, and what is the benefit period?
- 2What conditions must I meet to receive the advertised discount — and what happens if I miss a payment deadline?
- 3What rates will I pay after the benefit period expires if I do not switch?
- 4Is there an exit fee if I switch to another retailer before the contract ends?
- 5What is the solar feed-in tariff on this plan, and how does it compare to the minimum feed-in tariff?
- 6Are there any default add-on charges (GreenPower, carbon offsets) included in this plan?
Disclaimer: This guide is for educational purposes only and does not constitute legal advice. Contract law varies by jurisdiction and individual circumstances. Always consult a qualified legal professional before making decisions based on this information.