The Australian Energy Regulator (AER) has today released an issues paper on the 2024–25 default market offer (DMO 6) price determination.
The DMO 6 issues paper, open for consultation until 3 November, is the first step in the AER’s annual DMO price setting process.
The AER is considering updates to its methodology for calculating the DMO to ensure it continues to meet the policy objectives. These include:
- whether the approach to retail allowances remains appropriate
- whether and how to change our approach to the customer load profile which is used to model wholesale costs as the uptake of advanced meters increase and consumers continue to install solar PV systems
- whether we should continue collecting confidential hedge contract data from all retailers and generators to assess the wholesale costs of retailers
- whether a different wholesale forecasting method is required for South Australia given the currently limited (and decreasing) contract liquidity levels in South Australia.
Public consultation
The AER invites submissions from interested stakeholders on issues paper by 3 November 2023. Written submissions or requests to make a submission via alternative methods should be emailed to dmo
aer [dot] gov [dot] au (dmo[at]aer[dot]gov[dot]au).
The AER will also hold a public forum to allow stakeholders to meet and share views about the methodology used for DMO6. Further details on this event will be provided on our website soon.
The DMO 6 draft determination will be released in early March 2024 for consultation, with the final determination published in May 2024 to come into effect on 1 July 2024.
Background
The DMO price is the maximum price a retailer can charge a standing offer customer in south-east Queensland, New South Wales and South Australia. Its objectives are to prevent retailers from charging customers on standing offers unjustifiably high prices, while enabling retailers to recover their costs and also maintaining incentives for retail market competition, participation and innovation.