Thousands of electricity customers on a standing offer contract across New South Wales, South East Queensland and South Australia will share in over $65 million of bill savings in 2021-22 following the release of the final Default Market Offer (DMO) by the Australian Energy Regulator (AER).
The final DMO determination will cut the price for 727,000 electricity customers on a standing offer by up to $116 for households and $441 for small businesses from 1 July 2021.
AER Chair, Clare Savage, said the DMO caps the price retailers can charge electricity customers on a default standing offer contract.
“The DMO is not designed to be the most competitive deal but rather it is a safety net for customers who don’t or can’t shop around when it comes to their electricity contract,” Ms Savage said.
“Most retailers have cheaper energy deals on offer, so shopping around remains the best way to get a better price, and I encourage customers to visit our free and independent Energy Made Easy website to compare energy deals.
“While the DMO caps the price retailers can charge their customers, it is still set at a level that enables retailers to recover their costs and encourages retailers to compete to offer a better deal to their customers.”
Minister for Energy and Emissions Reduction, Angus Taylor, said the Default Market Offer is continuing to deliver for Australians, driving down the price of energy and putting more money in people’s pockets.
“This price update confirms energy costs are continuing to fall and that is good news for hundreds of thousands of hard-working Australian families and small businesses,” Mr Taylor said.
“As we bounce back from the COVID-19 pandemic, low energy prices will help drive our economic recovery by boosting the spending ability of households and businesses.”
The AER developed the latest DMO using the same approach as the previous determination, updating prices to reflect forecast changes in retailers’ costs, including environmental, wholesale electricity and network costs, and indexing retail costs by the Consumer Price Index.
The AER will review the methodology used to develop the DMO later this year to ensure that it continues to meet its objectives, and will be seeking views from consumers and other groups as part of this process.
The DMO was introduced in 2019 and is set annually by the AER. The new 2021-22 prices will take effect from 1 July 2021.
Find out more by visiting Determination of default market offer prices 2021-22.
