Draft DMO 2021–22 open for consultation

The Australian Energy Regulator (AER) has today released for public consultation its draft Default Market Offer (DMO) prices for 1 July 2021 to 30 June 2022.

AER Chair Clare Savage said the DMO protects households and small businesses by capping the price retailers can charge consumers on a standing offer contract.

“Since the introduction of the DMO in 2019, residential and small business standing offer consumers have seen their yearly bills reduce by hundreds of dollars. We have also seen retailer competition remain steady,” Ms Savage said.

“We are now in the process of setting the DMO for the third time and we want to hear from a wide range of stakeholders and consumers in determining our final DMO prices for 2021–22.

“These are draft prices and are subject to change in the final determination, however we expect customers to continue to see ongoing savings.” 

Under the draft determination, compared to DMO 2020–21, DMO 2021–22 prices will:

• further reduce by between 4.6 per cent and 7.9 per cent for residential consumers, depending on the region
• further reduce by between 4.1 per cent and 8.5 per cent for small business consumers, depending on the region.

To develop the draft 2021–22 DMO prices, the AER used the same approach as it did for the previous determination, which is to update the prices to reflect forecast changes in retailers’ costs, including environmental, wholesale electricity and network costs, and indexing retail costs by the Consumer Price Index.

“It is important that in the future we review our approach to calculating DMO prices to make sure it remains fit for purpose. We are currently considering the timing of such a review and will provide more information in the final determination,” Ms Savage said.

“It’s also critical for consumers to remember the DMO is intended as a safety net for those who don’t or can’t shop around and it’s not designed to be the most competitive deal.

“Most retailers have cheaper energy deals on offer, so shopping around remains the best way to get the best price. I encourage consumers to visit our free and independent Energy Made Easy website to compare energy deals.”

The AER is seeking feedback on the draft DMO 2021–22 by 18 March 2021.

The final determination will be published by 30 April 2021, with the new prices to take effect from 1 July 2021.