Draft Determination on the Default Market Offer – Have Your Say

Draft Determination on the Default Market Offer – Have Your Say

Draft determination on the default market offer

This week, the Australian Energy Regulator (AER) has released its draft determination on the Default Market Offer (DMO) pricing for 1 July 2020 to 30 June 2021 for public consultation.

The DMO was introduced last year in July 2019. Since being introduced, a typical residential standing offer bill has reduced by $181 per annum. The typical saving for small businesses was up to $896 per annum.

What Is the Default Market Offer?

The Default Market Offer is the maximum energy rate that energy companies can charge for standing offer prices and the reference price is based on a set average consumption amount

It was introduced to provide clarity for consumers and to overcome the issue of large and potentially misleading discounts, which may hide inflated electricity prices.

What Can Consumers Expect from the  Price Changes?

Residential

  •  New South Wales – $9 – $16 higher depending on the distribution zone
  • South East Queensland – $86 lower
  • South Australia – $85 lower

Small Business

  • New South Wales – $23 lower to $46 higher depending on distribution zone
  • South East Queensland – $378 lower
  • South Australia – $691 lower

Why Are the Changes Occurring?

Increase
In New South Wales, the small increase stems from forecast increases in wholesale costs.

The increase is also driven by the projected continued uptake of small generation units (I.e. household solar PV) in NSW. Decrease
The South East Queensland and South Australia price reductions stem from forecast reductions in wholesale costs and network costs.

Have Your Say!

Public consultation closes on 9 March 2020. Following this, the final determination for the Default Market Offer 2020-2021 will be published in April 2020.  
 
Submissions by email – All submissions sent by email should be sent in Microsoft Word or another text readable format and sent to DMO@aer.gov.au  
Submissions by post – Submissions by post can be sent to –  
Mark Feather 
General Manager 
Policy and Performance 
Australian Energy Regulator 
GPO Box 520 
Melbourne Vic 3001 
 
If you would like a free review of your current electricity bill, click here to contact us today.  
 

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