To put an end to energy customers being stung with ‘unjustifiably’ high electricity prices, the Australian Energy Regulator (AER) has issued its final determination on Default Market Offer (DMO) prices following recommendations from the Australian Competition and Consumers Commission (ACCC) that will come into effect from July 2019.
According to AER Chair, Paula Conboy, the new DMO prices will not only be set at a level that will protect customers who don’t regularly compare energy plans, but will also allow retailers to perform competitively and innovatively, with opportunities for investment.
“Standing offers are no longer working as they were intended and this is causing financial harm to disengaged consumers. Our final decision will bring down bills for most people on those offers,” said Conboy.
It’s promised that the DMO prices will deliver annual savings for residential customers of approximately:
- Between $129 and $181 for New South Wales (depending on distribution zone)
- $118 for South-Eastern Queensland
- $171 for South Australia
The DMO will also be used as a reference bill from which all discounts must be calculated. This is to stop retailers from offering confusing discounts and to help customers decide which offer will deliver lower bills.
“Working with our ACCC colleagues, we will monitor the impact of DMO prices, especially changes retailers make to their standing and market offer prices. This work will inform future DMO decisions,” said Cobnoy.
Standing offer, market offer - what’s the difference?
With the energy market proving to be difficult to navigate for everyday Aussies, we chatted to Mozo’s energy expert, Nathan Warne, for a quick rundown.
“All retailers must have a standing offer plan, but they’re often more expensive than market offers because there are no discounts and the government sets the minimum terms and conditions. You could be on a standing offer if you haven’t chosen a market offer or if your market offer contract has ended,” he said.
Customers on standing offers will be rolled onto the default market offer come July 1 2019.
“On the other hand, a market offer tends to be a bit more competitive, but there’s still a lack of clarity in the discounts and tariffs.’’
And though customers on standing offers could soon see savings on their bills, Warne has still encouraged Aussies to do the legwork when it comes to finding the best deals.
“If you are going to be moved onto a default offer, still consider if you could be getting a better deal elsewhere,” he said.
“Shopping around and comparing plans in your area can mean big savings - simply calling your retailer and asking for a better deal can make a difference.”
Get started on switching to a better value energy plan today by heading over to our energy comparison tool or by checking out some offers below.