Australia Electricity Cost Menu Pricing Guide (2026): Turn kWh Volatility Into Clear Price Floors

Energy cost is one of the easiest leaks to miss. It sits in one utility line, so many teams never push it down to item level.

That worked when power costs were stable. In 2026, it is a risky shortcut.

Quick Summary

• ABS reports electricity at +21.5% YoY in the December 2025 CPI release.
• The same release shows meals out and takeaway food at +3.5% YoY.
• AER’s final DMO 2025-26 decision (effective 1 July 2025) shows small-business standing-offer changes by region, including increases up to 8.5%.
• Practical fix: add kWh-per-dish costing into your standard menu floor formula and review monthly.

Why This Matters for Owner-Operators

When labour and rent are already tight, “small” energy misses add up. The pain usually appears as busy weeks with lower-than-expected contribution.

In Australian hospitality communities, owners regularly describe this as: “We are selling plenty, but utility bills and wages eat the win.”

The kWh-to-Menu Formula

energyCostPerDish =
  ((equipmentkW x runtimeHours x tariffPerkWh) + allocatedDailySupplyCharge)
  / servingsFromRun

Then integrate into your menu floor:

requiredExGstPrice =
  (foodCost + labourCost + energyCostPerDish + otherVariableCosts)
  / (1 - targetContributionMargin)

displayedPriceInclGst = requiredExGstPrice x 1.10

Worked Example (Cafe Hot-Food Batch)

Assumptions:

• Combined equipment draw: 11.5 kW
• Runtime for batch: 1.6 hours
• Tariff: AUD 0.36/kWh
• Allocated supply charge for this run: AUD 2.20
• Servings produced: 52

Energy for run:

11.5 x 1.6 x 0.36 = AUD 6.62

Total energy allocation:

6.62 + 2.20 = AUD 8.82

Per-dish energy cost:

8.82 / 52 = AUD 0.17

If your old model assumed AUD 0.10, the gap is AUD 0.07 per dish. At 1,400 servings per month, that is AUD 98/month of silent leakage on one batch line.

5-Step Pricing Control (Monthly)

1. Pull latest tariff and bill components (energy + supply charge).
2. Re-measure runtime and batch yield for top energy-heavy SKUs.
3. Update energy cost per dish.
4. Recompute ex-GST price floors for top sellers.
5. Publish GST-inclusive prices consistently across POS and online channels.

Common Mistakes

1. Using one flat utility % across the entire menu.
2. Ignoring supply charge allocation in item-level costing.
3. Repricing from food inflation only while power cost shifts faster.
4. Updating dine-in prices but leaving delivery menus on old assumptions.

Related Guides

• Australia Hospitality Award Penalty Rates Pricing Guide
• Australia Public Holiday Surcharge Pricing Checklist
• Australia BAS/PAYG Cash Reserve Calendar
• Prime Cost Guide

KitchenCost helps you keep ingredient, labour, and utility assumptions in one costing workflow so item-level margins stay current.

Try KitchenCost.

Sources (checked on 2026-02-14)

• ABS - Consumer Price Index, Australia, December 2025
• AER - Final determination 2025-26 safety net prices (DMO)
• Fair Work - Minimum wages
• ATO - How GST works
• Reddit: r/australia - hospitality venue closure pressure discussion