DMOs, VDOs and discounts - the new energy market changes you need to know about

Ceyda Erem

01 Jul 2019

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Codes, reports and guidelines - the three words that have hoped to shift the energy market from complicated to transparent. 

If you’ve been paying attention to all the latest energy news floating around, you’d know that today also marks the day of the rollout of the new default market offer (DMO) across NSW, South-East QLD and SA. 

The purpose of the DMO is to ensure that customers do not pay more than they need to regardless of how much energy their household uses (low, medium or high) - it is the maximum annual price a retailer can charge. 

“The DMO is designed to make sure that the Aussies who aren’t actively looking for a new energy plan are not paying more than they need to,” said Mozo energy expert, Nathan Warne. 

“Some households may find that it does make a difference to their annual bill, however I don’t think it’ll make a drastic difference to overall prices or increase competition, as retailers can still offer plans that are cheaper than its DMO plan.”

Victoria will also be introducing their own version of the DMO called the ‘Victorian Default Offer’ (VDO), which is available to all Victorian customers, not just those on standing offers. 

But while annual savings may be music to the ears of many Aussie customers, Warne has reminded Aussies that the new default offers may not accurately reflect every household and may not be the best offer on the market. 

“Even though retailers must comply with this new rule, just remember the set price is still based off an average usage calculation, so your usage could still be under or over the amount,” he explained. 

“And if you’re in Victoria, make sure you’re comparing the VDO to other deals around, you might be better off on another plan.” 

What should I do?

If you’re an energy customer on a standing offer in NSW, South-East QLD and SA, your retailer will contact you about being rolled onto the new default offer. 

Those in Victoria will be able to preview and sign up to the VDO if they choose to. 

Find out if your retailer hiked market offer prices by checking out our energy price updates page.

Disappearing discounts

Only two weeks before retailers prepared to announce whether they’d be hiking prices or not, the ACCC released a new Electricity Retail Code, which retailers would have to comply with from today. 

One big change to have come out of the new code was how discounts were presented to customers. 

Headline discounting or conditional discounts are now banned and are no longer permitted to be the most visibly price seen in advertisements. It is also compulsory for a retailer to clearly state all conditions. 

“Discounts have always made it trickier to compare energy plans and with the new ban, so I wouldn’t be surprised if retailers now started getting more competitive by cutting their prices to entice customers,” said Warne. 

Thinking it’s time you started comparing energy plans in your area? Then make your next top our energy comparison tool

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