Australia to stop power price gouging with new reforms
Solar panels on a rooftop with a home battery installation beside an electricity meter, all in bright natural light. Image created by ChatGPT with DALL·E by OpenAI
VOCABULARY LIST
Default Market Offer (noun) /ˈdəfɔlt ˈmɑkət ˈɒfə/: The official benchmark price for electricity set by regulators.
Example: The Default Market Offer helps customers know if they’re paying too much for electricity.Benchmark (noun) /ˈbɛnʃmɑk/: A standard or reference point used to compare things.
Example: The DMO acts as a benchmark for fair electricity prices.Price gouging (noun) /praɪs ˈɡaʊdʒɪŋ/: Charging unfairly high prices, especially when people have no other choice.
Example: The government wants to stop price gouging by energy companies.Shop around (phrasal verb) /ʃɒp əˈraʊnd/: To compare prices or options before making a decision.
Example: It’s smart to shop around for the best electricity deal.Competition (noun) /ˌkɒmpəˈtɪʃən/: The effort of businesses to get more customers than others.
Example: More competition between companies can help lower prices.Competition allowance (noun) /ˌkɒmpəˈtɪʃən əˈlaʊəns/: An extra cost in energy pricing to cover customer acquisition.
Example: The competition allowance might be removed to lower electricity bills.Restraint (noun) /rəˈstreɪnt/: A limit or control placed on something.
Example: New restraints on retailers could stop unfair pricing.Uptake (noun) /ˈʌpteɪk/: The rate at which people start using a service or product.
Example: There has been strong uptake of rooftop solar in Australia.Slash (verb) /slæʃ/: To cut or reduce something by a large amount.
Example: The subsidy will slash battery costs by about $4,000.Cost-of-living relief (expression) /kɒst əv ˈlɪvɪŋ rəˈlif/: Help to reduce everyday expenses.
Example: Removing extra charges from power bills offers cost-of-living relief.
ARTICLE
The Albanese government is planning changes to protect Australians from high electricity bills. At the Australian Energy Week event, Energy Minister Chris Bowen said a review of the Default Market Offer (DMO) will begin soon. The DMO sets a benchmark electricity price for residential and small business customers in New South Wales, South Australia, south‑east Queensland, and Victoria.
This benchmark acts as a guide, helping people shop around for better deals from energy companies. It was introduced to stop price gouging, which is when companies charge customers unfairly high prices. It also encourages competition among electricity retailers. But Bowen admitted that the DMO has not worked as well as expected.
From July 2025, energy bills are expected to rise across many parts of Australia:
In New South Wales, customers will see the biggest increases—between 8.3% and 9.7%.
In south‑east Queensland, increases will be smaller—around 0.5% to 3.7%.
In South Australia, the rise will be between 2.3% and 3.2%.
In Victoria, bills are only expected to rise by about 1% on average, and some customers may even pay less.
Because of these small increases, Victoria’s system is now seen as a good example for other states. Bowen said Victoria is showing how smart regulation can protect consumers.
One part of the DMO that may be removed is the competition allowance. This allowance adds extra costs to reflect what retailers spend to gain and keep customers. Bowen said the government may cut it from the price model. They also want to introduce new restraints on what companies are allowed to charge customers.
Bowen shared concern that around 80% of Australians could be getting a better deal if the system worked more fairly. He said the current rules put too much pressure on customers to search for better plans themselves. The government’s goal is to build a new, well‑regulated system that helps people automatically and puts downward pressure on prices.
At the same time, the government is looking at ways to support the huge uptake of rooftop solar and home batteries. Bowen introduced a new $2.3 billion subsidy plan that will reduce the cost of small household batteries by about 30%. From 1 July, people with solar panels—or those planning to install them—can receive this financial support.
The plan will slash the cost of a typical home battery by about $4,000. According to government analysis, this could help families save up to $2,300 a year, which is equal to about 90% of the average electricity bill.
Bowen also announced that an industry advisory committee will be created to help guide the new battery scheme. He noted that battery sales are now growing faster than new solar panel sales, showing that more Australians want to store their solar energy and lower their bills.
These changes are part of a wider government effort to give households more support and cost‑of‑living relief as energy prices remain high.
SOURCE:
This article is based on: https://www.theguardian.com/australia-news/2025/jun/18/australia-power-bills-price-gouging-default-market-offer-review-chris-bowen
Reflection Questions
Instructions:
Use these questions as:
– Speaking practice (e.g. talk to yourself, record and listen back)
– Writing practice (e.g. short paragraph answers)
– Class discussion with your teacher or classmates
Have you ever had a bill hike that surprised you? How did you react?
Do you think the government should control prices like electricity? Why or why not?
What choices do you make in your life because of costs?
Would you install solar panels or batteries at home? Explain your reasons.
How can people find better deals and avoid being overcharged?
Comprehension activity - multiple choice
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