AER commences consultation on 2021-22 Default Market Offer determination

The Australian Energy Regulator (AER) has today released a position paper on the 2021-22 Default Market Offer (DMO) price determination for consultation.

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.

The intention of the DMO is to prevent retailers charging unjustifiably high standing offer prices, while allowing them to recover their costs of providing services and allowing for competition, innovation and market participation.

The DMO applies to residential customers on flat rate and time of use tariffs, and small business customers on flat rate tariffs.

The paper is the first step in the process in setting the 2021-22 DMO prices. The AER is seeking views on a number of aspects of the proposed pricing methodology to set DMO prices.

Feedback from this consultation will inform the development of the draft DMO prices, which will be released in early 2021 for consultation. The AER’s final 2021-22 DMO determination will be published by May 2021 and come into effect on 1 July 2021.

Stakeholders are invited to an online forum 2pm Thursday 29 October 2020. Stakeholders can register their attendance before 26 October 2020.

Background

Under the Competition and Consumer (Industry Code – Electricity Retail) Regulations 2019 (the Regulations), the AER is required to determine annual DMO prices for residential and small business customers.

The DMO also acts as a ‘reference price’ for residential and small businesses market offers. When advertising or promoting a market offer, retailers must show the price of their offer in comparison to the DMO price so customers can better compare the prices.

Invitation for submissions

Interested parties are invited to make a submission on the position paper by close of business Thursday 19 November 2020. Submissions should be emailed to DMO@aer.gov.au or alternatively submissions can be posted to:

Mr Mark Feather
General Manager, Policy and Performance
Australian Energy Regulator
GPO Box 520
Melbourne Vic 3001

The AER prefers that all submissions be sent in an electronic format (Microsoft Word) and will be made publicly available to facilitate an informed, transparent and robust consultation process. Submissions will be treated as public documents and posted on the AER's website unless prior arrangements are made with the AER to treat the submission, or portions of it, as confidential. Those wishing to submit confidential information are requested to:

  • clearly identify the information that is the subject of the confidentiality claim
  • provide a non-confidential version of the submission.

 

Sector: 
Issued date: 
20 October 2020
AER reference: 
AC 140/20
Contact: 
General enquiries - Default Market Offer DMO@aer.gov.au