The AER is required by competition and consumer regulations to determine the Default market offer (DMO) each year for New South Wales, south-east Queensland and South Australia. It has been operating since 2019.
Determining the DMO price each year is one of the ways the Australian Energy Regulator works to ensure energy consumers are better off now, and in the future.
- protects consumers from unjustifiably high electricity prices,
- is a safety net price for consumers who haven’t shopped around,
- is the maximum price an electricity company can charge customers on standard retail plans, and when advertising other offers they must compare it to the DMO price,
- is set each year and takes into account a range of factors and is adjusted according to market conditions,
- is not a “best offer” price and it may not be the best offer in an area.
This video explains what the DMO is and why it’s an important consumer protection mechanism.
If you are concerned about the price you’re paying for electricity, contact your retailer or there may be a better offer out there. Our comparison site www.energymadeeasy.gov.au can help.
Frequently asked questions
Market retail plans: often contain discounts or other offers. The price is set by the retailer, and it can change at any time. When advertising these plans the retailer must compare their offers to the DMO price so you can see how good their deal is. Around 90% of customers are on these plans.
Standard retail plans: are the default plans offered to customers when they don’t sign up to a market retail plan. It may not be the best offer in an area but the maximum price charged is determined by the DMO price, which once set on 1 July won’t change for the next 12 months. Around 10% of customers are on these plans.
Residential and business electricity consumers in parts of Australia where there is no other retail price regulation – New South Wales, south-east Queensland and South Australia.
In these areas, around 10% of households and around 18% of small businesses are on standard retail plans.
When energy retailers advertise their market retail plans they have to show how that plan compares to the default offer price.
This allows consumers to compare plans and see how good electricity deals actually are.
When setting the DMO price each year we take into account several factors, and feedback from industry and consumers, when calculating the DMO price, including:
- the cost to buy electricity (wholesale cost)
- the cost to transport electricity (network cost)
- the cost to comply with government environment schemes (environmental cost)
- the cost to serve customers (retail cost)
- Know your plan: take out your latest energy bill to get a feel for the basic information.
- Contact your retailer and ask theme these questions:
- What kind of contract am I on and when does it expire?
- Are my prices going up? If so, when and by how much?
- Do you have a better deal for me?
- Consider looking for a better energy plan
- Head to our free and independent energy price comparison website www.energymadeeasy.gov.au. Have a copy of your bill handy. Before switching, ask your new retailer the same questions before signing up.
- Week commencing 13 March 2023: Draft determination released
- Before 26 May 2023: Final determination released
- 1 July 2023: New DMO price comes into effect.
For more information about the timing of the draft determination release.
Keep up to date with the latest information about the status of the DMO determination.