The setting of a regulated Default Market Offer (DMO) will be of limited benefit to just 14 per cent of customers in South Australia, NSW and South-East Queensland. These customers would all be better off on cheaper competitive offers, the energy industry said today.
The Australian Energy Council’s Chief Executive, Sarah McNamara, said the Australian Energy Regulator’s release of its DMO decision today highlights that competitive market offers remain a better option for households and businesses.
"Significantly, for the 86 per cent of customers who are already on a cheaper market deal, today’s announcement will not lower prices.
“For those currently on an unregulated standing offer who will move to a DMO, the AER has confirmed that savings for residential customers will range from $118 - $181 across the three jurisdictions. Larger savings are available for small businesses.
“But the main point is that every one of those customers would be better off on a cheaper market deal.
“Any customer who remains on the default price, regulated or not, will be paying more than they need to. We welcome the AER’s encouragement of households and businesses to seek out market deals and the Government’s own EnergyMadeEasy website is a useful tool to help customers to make that switch."
Ms McNamara noted that the AER had acknowledged the importance of maintaining competition by including an allowance for price headroom in its final determination.
“The approach taken by the AER does give the retail market the best chance of continuing to deliver competition and, with it, cheap market deals for consumers,” Ms McNamara said.
About the Australian Energy Council
The Council represents 23 major electricity and downstream natural gas businesses operating in competitive wholesale and retail energy markets. These businesses collectively generate the overwhelming majority of electricity in Australia and sell gas and electricity to over 10 million homes and businesses.