The Default market offer (DMO) came into effect on 1 July 2019. The DMO is a maximum price that retailers can charge electricity customers on default contracts known as standing offer contracts. The AER’s role is to determine the DMO price each year.
The DMO applies to small business and residential customers in areas where there is no other retail price regulation: South Australia, New South Wales and south-east Queensland. The DMO price for each area also acts as a ‘reference price’ for residential and small business offers in that area. When advertising or promoting offer pricing, retailers must show the price of their offer in comparison to the DMO/reference price. This helps customers more simply compare the price of different offers.
The Competition and Consumer (Industry Code – Electricity Retail) Regulations 2019 sets out the legislative framework for the DMO.
Issues paper
On 3 November 2022 we released an issues paper and have published submissions received. As part of the consultation process, we held an online stakeholder forum on 24 November 2022 to discuss issues raised in the issues paper, which was attended by around 100 people.
Draft determination
On 15 March 2023 the AER released its draft determination on the DMO price for 2023–24 and invited submissions by 6 April 2023, 18 submissions were received. An online stakeholder forum was also held on 31 March 2023.
ACIL Allen Consulting supported us in the design of a forecasting approach for wholesale and environmental costs. The report Default Market Offer: Wholesale energy and environmental costs estimates for DMO 5 Draft determination by ACIL Allen Consulting was published alongside the draft determination.
Final determination
On 25 May 2023 we published our final determination on Default Market Offer prices for the 2023–24 year. We have also published our cost assessment model and ACIL Allen's technical paper for the final determination alongside our decision.