Call him Danny. He runs a fish-and-chip shop on the main street of a town north of Newcastle, and each quarter an electricity bill arrives that he reads twice before he pays it. In the winter of 2023 that bill jumped by roughly a fifth almost overnight, and it has not come back down since; what has changed is less the size of the number at the bottom than the number of lines above it — a Commonwealth "energy bill relief" credit in some quarters, a state rebate notice in others. Danny is a composite, standing in for a documented pattern rather than one named business, but the pattern itself is real and measurable: household and small-business electricity prices across New South Wales rose sharply through 2023, and every government response since has looked less like lowering that new, higher price than like handing back a portion of it, one budget cycle at a time.
What the government did
The price on Danny's bill is not something Chris Minns' government sets directly. Since 2019, residential and small-business electricity prices in New South Wales, South Australia and south-east Queensland have been capped by the Default Market Offer (DMO) — a maximum price the Australian Energy Regulator (AER), a federal body, determines each year for customers on a standard, no-contract plan, built from wholesale energy, network ("poles and wires"), environmental scheme and retail cost components. New South Wales' own pricing body, the Independent Pricing and Regulatory Tribunal (IPART), stopped setting electricity prices when the DMO began; it now monitors retail competition and reports to the state's energy minister annually, but does not control the number on the bill (IPART, Retail prices, accessed 2026).
That number moved sharply on the Minns government's watch. The AER's final determination for 2023-24, released 25 May 2023 — two months after Labor won the March 2023 election — locked in residential DMO increases of 20.8% to 21.4% across NSW's three network areas, taking a typical Ausgrid customer's benchmark bill from roughly $1,512 to $1,827 a year (approx., calculated from the cited increase) (AER, Final Determination — Default Market Offer prices 2023-24, 25-May-2023). The following year was comparatively calm — the 2024-25 determination left most residential customers close to flat, with falls of up to 7% for some and rises of up to 2.7% for others, even as network charges alone kept climbing (AER, Revised Final Determination — Default Market Offer prices 2024-25, 3-Jun-2024). By 2025-26 prices were rising again: 8.6% to 9.1%, adding $155 to $228 a year depending on network area, effective 1 July 2025 (AER, Final Determination — Default Market Offer prices 2025-26, 26-May-2025).
Against that backdrop, the government's own actions have mostly softened the impact rather than reset the price. It has administered the Commonwealth's National Energy Bill Relief Fund, delivering an automatic $300 credit to every NSW electricity account through 2024-25, paid quarterly by retailers, followed by a $150 credit paid in two instalments from 1 July 2025 to the end of 2025 under a $1.8 billion national extension funded in the 2025-26 federal Budget (Australian/NSW Government, National Energy Bill Relief, energy.nsw.gov.au, 2024-2025). The 2025-26 NSW Budget records $579.0 million against this relief, the state's share of delivering the federally funded scheme (NSW Treasury, 2025-26 NSW Budget — Cost of living relief, Jun-2025). Layered underneath are two older, means-tested state schemes: the Low Income Household Rebate, worth up to $285 a year to concession card holders, and the Family Energy Rebate, worth up to $180 a year to eligible families (NSW Climate and Energy Action, Low Income Household Rebate and Family Energy Rebate, 2025-26 rates). Its other major move is the Home Energy Saver Program, $557.1 million in the 2025-26 Budget combining $480.0 million in interest-free loans of up to $15,000 and $77.1 million in discounts of up to $4,000 for lower-income households, to install solar, batteries and efficient appliances (NSW Treasury, 2025-26 NSW Budget — Cost of living relief, Jun-2025). Separately, the government has paid to keep the state's largest coal generator, Eraring, open past its original closure date to manage supply and price risk during the transition — covered in full in The Slow Decay's companion piece on the Eraring extension, and relevant here chiefly as one more input into the wholesale cost line on every DMO bill.
The strongest case
NSW does not set the price, and where it does have a choice, it has targeted the money and started attacking the underlying cost
A fair reading of the record starts with what the state government does not control. The DMO is a nationally designed cap, applied identically across NSW, South Australia and south-east Queensland by a federal regulator; the 2023-24 spike that did the most damage to household budgets was driven by an east-coast gas and coal price shock that began well before the March 2023 election and was already built into the AER's cost inputs by the time Labor took office. Blaming a state government for a price cap it does not set, on inputs it does not control, mistakes the architecture of the national market for a state policy choice. Where NSW does have discretion — how relief is delivered — it has arguably made sound calls: a universal Commonwealth credit reached every household fast, without a means test that would have delayed payment during the worst of the shock, while the Low Income and Family Energy Rebates keep targeting extra support at concession card holders, who spend a larger share of their income on power. And unlike a pure cash credit, the Home Energy Saver Program is a genuine structural instrument: a loan or discount that funds a battery, solar panels or efficient appliances lowers a household's underlying consumption for years, not just the quarter the cheque arrives — the government's own figuring suggests households acting on the 2025-26 DMO's efficiency signals could save up to $211 a year (NSW Treasury, 2025-26 NSW Budget — Cost of living relief, Jun-2025). On this reading, the state is doing the two things within its power — cushioning the shock fairly and investing in lower future demand — while leaving the price cap itself to the body legally responsible for setting it.
The evidence
Layered together, the three years of DMO determinations show a shock-pause-shock pattern rather than a one-off correction. A benchmark Ausgrid household went from roughly $1,512 before the 2023-24 rise to $1,827 in 2023-24, moved little through 2024-25, and is on the order of $1,990 to $2,000 a year in 2025-26 once the 8.6%-9.1% increase is applied (approx., calculated from the cited AER determinations) — a rise of close to a third in three years, spanning almost the entirety of the Minns government's term to date.
The rebates sitting on top of that trend are real money, but sized and timed on a separate cycle. A household with no concession card receives only the universal Commonwealth credit — $300 across 2024-25, $150 across 2025-26 — which shrank by half in the same year the DMO rose by close to a tenth. A concession card holder can stack the state's Low Income and Family Energy Rebates on top of that, reaching a combined $500-plus in a relief year (approx., adding the cited scheme values) — genuinely material, but calculated independently of what the DMO is doing that year.
The clearest evidence that rebates mask rather than reduce the underlying cost sits in the national accounts. Electricity costs recorded in the Consumer Price Index rose 21.5% in the twelve months to December 2025 — but the ABS's own analysis attributes most of that spike to rebates lapsing or being renewed on a different cycle to the year before, not to fresh price rises: strip out the effect of Commonwealth and state rebates and underlying electricity prices rose 4.6% over the same twelve months (ABS, Consumer Price Index, Australia, December 2025). The 21.5% headline is largely a statistical artefact of the relief cycle itself; the 4.6% figure sits closer to the structural trend rebates are not designed to touch. That trend has a visible cause in the network charge, which the AER's own cost breakdown puts at 33% to 48% of a DMO bill — the largest single component, alongside wholesale costs at 31% to 44% (AER, Final Determination — Default Market Offer prices 2025-26, 26-May-2025). Central-West Orana, the transmission project needed to connect the state's first renewable energy zone, was budgeted at roughly $650 million when declared in 2021; EnergyCo's own regulatory filing now puts its capital cost at $5,526.1 million — almost nine times the original estimate — recovered through that same network charge for decades (EnergyCo NSW, Central-West Orana Renewable Energy Zone — regulatory information, 2024).
The critique
Put the two halves of the record side by side and the shape of the problem is clear: relief has moved up and down on a budget cycle, while the price it offsets has moved in one direction, with only a single quiet year in three. The Commonwealth credit halved in the same twelve months the DMO rose by close to a tenth; for a household without a concession card, the smaller rebate barely dented the larger increase, let alone the roughly third-higher bill that increase sits on top of. None of the relief measures — federal, state or targeted — reduce the network or wholesale components that drive the DMO. They redistribute who bears the increase in a given quarter; they do not shrink it.
The relief is also structurally temporary in a way the underlying cost is not. The Energy Bill Relief Fund has needed two separate rounds of federal funding, in 2023 and again in the 2025-26 Budget, simply to keep pace, and there is no confirmed funding for a further round beyond the end of 2025 at the time of writing. A network charge, once a transmission line is built and its cost is rolled into the regulated asset base, is recovered over decades regardless of which government is in office or what any single budget can hand back.
A rebate is a tap a treasurer can turn off in one budget; a network charge, once built, is a bill households pay for thirty years.
Even the government's strongest structural answer, the Home Energy Saver Program, is modest against the scale of the cost it offsets. Most of its $557.1 million is a loan, not a subsidy — interest-free, but still repaid — and take-up depends on a household having the spare capacity to navigate an application and installation process; concession card holders, the group the rebates are designed to help most, are on the government's own eligibility settings the group least likely to have that spare capacity without dedicated support. And the Central-West Orana blowout, from $650 million to $5.5 billion, is not an isolated case: AEMO's transmission cost data shows project costs roughly doubling in some cases across its 2025 planning update, and the New England renewable energy zone's transmission corridor is separately estimated at up to $6 billion, still under construction. Every dollar of overrun becomes a network charge on a future bill that no rebate round, at current funding, is sized to match.
The risk to the future
The next rebate cliff is already visible in the CPI data, and the cost underneath it keeps compounding
The December 2025 CPI read is a preview of what happens every time a rebate cycle turns over: a 21.5% headline jump the ABS itself attributes mostly to relief lapsing or resetting, not to a fresh 21.5% cost shock. That pattern will repeat at the end of every future relief round, unless a government commits to permanent, indexed support — a commitment none has made yet. Underneath that cycle, the network and wholesale components that already make up most of a DMO bill keep growing, driven by transmission blowouts like Central-West Orana's and by a still-unbuilt New England corridor estimated at up to $6 billion. If similar blowouts recur, or if Eraring's now twice-delayed exit slips again and its underwriting is triggered, that cost base is on a trajectory that outruns what any single rebate round is funded to offset. The practical risk for NSW households is not one bad year; it is a state whose relief depends on the federal budget cycle renewing indefinitely, propping up a household's ability to pay a price that keeps climbing underneath the relief.