If your business buys energy on a negotiated contract, your rates didn’t move in July, but your network charges did. For some networks, the increase is material.
The commercial network tariff changes taking effect on 1 July 2026 won’t show up in your negotiated contract rates, but they will show up on your bill. Much of the July coverage was about retail prices falling for households and small business. For larger commercial and industrial sites, that’s the wrong thing to watch. Your energy and retail costs sit inside a contract you’ve already negotiated. The part of your bill that resets every 1 July, automatically, regardless of your contract, is the network charge. And for 2026–27, those charges moved in very different directions depending on where your sites are.
Here’s what changed, why the increases aren’t uniform, and where the levers actually are.
How Commercial Network Tariffs Work for Large Businesses
It’s worth being precise about what does and doesn’t move, because it’s widely misunderstood.
Small customers on a standing offer are covered by a regulated benchmark, the Default Market Offer (DMO) in NSW, SE QLD and SA, or the Victorian Default Offer (VDO), which bundles every cost component into one price. (We covered that in our small-business price update.)
Large commercial and industrial sites don’t work that way. Your wholesale energy and retail margin are locked into a negotiated supply agreement. The one component that isn’t, and that the Australian Energy Regulator re-approves each year for 1 July, is the network (distribution) tariff: the charge for moving power across the poles and wires to your site. So when people say “network tariffs reset in July,” for a large business that is the change. Everything else is governed by your contract.
What’s actually in a network tariff
A commercial network tariff usually has three moving parts:
- A fixed (supply) charge: a daily standing charge for the connection.
- An energy charge: cents per kWh, often split into peak and off-peak periods on larger tariffs.
- A demand (capacity) charge: billed on your maximum demand, typically measured in kVA. This is the one that catches businesses out: it’s driven by your single highest demand interval, not your total consumption. Two sites using the same number of kWh can pay very different demand charges depending on how spiky their load is.
On a demand tariff, that capacity charge is frequently the largest line on the bill, which is exactly why the way it changed this year matters.
Network Tariff Changes for 2026–27: Ausgrid, Energex, United Energy and More
We modelled the new AER-approved network prices for a representative mid-size site, 400 MWh a year, a 160 kVA maximum demand, split 60% peak / 40% off-peak, on each network’s LV demand (kVA) tariff. The annual network cost (excluding GST) moved like this:
| Network (region) | 2025–26 | 2026–27 | Change |
| Ausgrid (NSW) | $60,200 | $65,800 | +9.3% |
| CitiPower (VIC) | $43,200 | $45,400 | +5.0% |
| Powercor (VIC) | $44,600 | $45,400 | +1.8% |
| United Energy (VIC) | $37,500 | $43,900 | +17.3% |
| Energex (SE QLD) | $39,800 | $43,900 | +10.4% |
| SA Power Networks (SA) | $52,400 | $55,800 | +6.6% |
Illustrative only. Modelled annual network charges (ex GST) for a representative site using 400 MWh a year (60% peak / 40% off-peak) with a 160 kVA maximum demand, on each network’s LV demand (kVA) tariff. Your figures depend on your network, your tariff, and your load profile.
The headline: for the same site, the year-on-year increase ranges from under 2% to around 17%. Where your sites sit matters as much as how you use energy.
Why the increases aren’t uniform
The totals hide two different stories, and both are useful to understand.
Most of the change is being driven by demand and energy charges rising together, but in different proportions network to network. On United Energy, both the energy rate and the year-round (rolling) demand rate jumped (energy up around 20%, rolling demand up around 24%), which is why a site there sees the largest increase despite starting from the lowest base. Energex is the opposite shape: its energy rate rose sharply (around 20%) while its demand charge barely moved. Ausgrid lifted on both fronts more evenly. The Victorian incumbents CitiPower and Powercor were comparatively mild.
There’s also a structural difference worth knowing. In Victoria and NSW, the LV demand tariffs are time-of-use, so when you draw power changes what you pay. In SE QLD and SA, the equivalent LV demand tariffs charge a single anytime energy rate plus a capacity charge. That changes which levers move the needle: a time-of-use site can benefit from shifting load out of peak windows, while an anytime-plus-capacity site gets more from managing its peak kVA.
There’s a seasonal structure worth understanding, because it shapes how you manage the bill. The Victorian networks charge demand in two parts: a 12-month rolling demand that applies every month of the year, plus an additional “incentive” demand levied only over summer (December to March). South Australia works similarly: a year-round demand component plus a separate peak-demand charge across November to March. In both states your summer peak does double duty, it lifts the year-round charge and triggers the summer charge, so controlling it carries real weight.
How to Reduce Your Demand Charges: The Levers Available to Large Sites
A network charge increase isn’t simply a cost to absorb. For a site on a demand tariff, several things are genuinely controllable:
- Tariff selection. Networks publish multiple commercial tariffs, and the one a site defaulted to is not always the one that best fits its current load. The right tariff for a steady, high-load-factor site is rarely the right one for a peaky, intermittent site.
- Demand and power factor. Because the capacity charge is billed on kVA, reducing your peak demand, or correcting a poor power factor so your kVA sits closer to your kW, directly lowers the charge.
- Charge validation. Network charges are applied automatically against the AER-approved schedule. Validating that your site is billed on the correct tariff, at the correct approved 2026–27 rates, is a basic assurance step that’s easy to skip and occasionally worth real money.
- Model your own profile. The table above is a representative site. Your exposure depends on your actual peak kVA, your peak/off-peak split and your network, which is exactly what a proper review quantifies.
Framed correctly, this is a governance exercise as much as a savings one: a defensible, documented check that each site is on the right tariff, billed correctly, and that the business understands its exposure heading into the year. And network charges are only one part of the picture – if a site’s total costs are climbing, it’s worth checking alongside the tariff review.
A note for smaller sites on time-of-use
If you also run smaller sites on small-business time-of-use plans, their network charges moved too, most networks lifted between roughly 2% and 13% for 2026–27, with a couple flat or slightly lower. Those sites are usually covered by the regulated benchmark, so the action there is reviewing the retail plan rather than the network tariff. See our small-business update.
How Selectricity helps
Selectricity reviews network tariffs across our managed portfolio every year as a standard part of service, and runs the same review for other businesses on a shared-savings or fee-for-service basis. We model each site against the new approved schedules, confirm it’s on the best-fit tariff, validate that charges are applied correctly, and quantify the demand and power-factor levers, then give you a recommendation you can put in front of a board or CFO.
Our focus is a defensible, explainable outcome: the right tariff for how each site actually behaves, and a clear view of your exposure, not a headline discount. We work with commercial and industrial businesses across the National Electricity Market: New South Wales, Victoria, Queensland, South Australia, Tasmania and the ACT.
Frequently asked questions
What changed for commercial network tariffs on 1 July 2026?
The AER’s approved 2026–27 network (distribution) prices took effect. For large businesses on negotiated supply contracts, this is the main July change, because energy and retail costs are fixed by contract while network charges reset annually.
What is a kVA demand charge?
It’s a capacity charge billed on a site’s maximum demand, measured in kVA (apparent power). It’s driven by your single highest demand interval rather than total consumption, so a spiky load pays more than a steady one using the same kWh.
Why did some networks rise much more than others?
Each network sets its own prices within the AER framework. For 2026–27, demand and energy charges rose by different amounts network to network, from low single digits up to around 17% for a representative demand site, depending on the network.
Do network tariffs change differently for large and small customers?
The underlying network prices change for everyone on 1 July. Small customers usually see it bundled inside the regulated DMO or VDO benchmark, while large customers see the network charge as a distinct, contracted-around line on the bill.
Can a business reduce its demand charges?
Often, yes. The levers are being on the best-fit tariff, reducing peak demand, and correcting poor power factor so kVA sits closer to kW. A network tariff review quantifies what’s achievable for a specific site.
How often should a business review its network tariff?
At least annually, aligned to the 1 July reset, and whenever a site’s load or operations change materially.
