Thousands of customers on a standing offer contract across New South Wales, South-East Queensland and South Australia will share in over $65 million of bill savings in 2021-22 following the Australian Energy Regulator (AER) today releasing the final Default Market Offer (DMO).
The final DMO determination will cut the price 727,000 electricity customers on a standing offer pay from 1 July 2021 by up to $116 for households and $441 for small businesses.
AER Chair Clare Savage said the DMO caps the price retailers can charge electricity customers on a default standing offer contract.
“The DMO is not designed to be the most competitive deal but rather it is a safety net for customers who don’t or can’t shop around when it comes to their electricity contract,” Ms Savage said.
“Most retailers have cheaper energy deals on offer, so shopping around remains the best way to get a better price and I encourage customers to visit our free and independent Energy Made Easy website to compare energy deals.
“While the DMO caps the price retailers can charge their customers it is still set at a level that enables retailers to recover their costs and encourages retailers to compete to offer a better deal to their customers.”
The AER developed the latest DMO using the same approach as the previous determination, updating prices to reflect forecast changes in retailers’ costs, including environmental, wholesale electricity and network costs, and indexing retail costs by the Consumer Price Index.
The AER will review the methodology used to develop the DMO later this year to ensure that it continues to meet its objectives, and will be seeking views from consumers and other groups as part of this process.
The DMO was introduced in 2019 and is set annually by the AER. The new 2021-22 prices will take effect from 1 July 2021.
Find out more by visiting Determination of default market offer prices 2021-22.
| Total standing offer customers (December 2020) | 2020-21 DMO prices | 2021-22 DMO prices | Savings for average standing offer customer in 2021-22 from 2020-21 | Estimated total savings | |
|---|---|---|---|---|---|
| New South Wales (depending on distribution zone) | 368,180 (11.1%) | $1462-$1960 | $1393-$1907 | $53-$102 | $19,513,540 |
| South-Eastern Queensland | 175,453 (12.1%) | $1508 | $1455 | $53 | $9,299,009 |
| South Australia | 68,873 (8.7%) | $1832 | $1716 | $116 | $7,989,268 |
| Total standing offer customers (December 2020) | 2020-21 DMO prices | 2021-22 DMO prices | Savings for average standing offer customer in 2021-22 from 2020-21 | Estimated total savings | |
|---|---|---|---|---|---|
| New South Wales (depending on distribution zone) | 74,356 (22.2%) | $6177-$8041 | $5736-$7791 | $250-$441 | $18,589,000 |
| South-Eastern Queensland | 26,053 (23.5%) | $5760 | $5517 | $243 | $6,330,879 |
| South Australia | 13,907 (15.8%) | $8305 | $8033 | $272 | $3,782,704 |