Retail Electricity Prices review - Determination of default market offer prices 2022-23

Sector: 
Segment: 
Status: 
Category: 
Retail pricing information
Date initiated: 
25 October 2021
Contact: 
General enquiries - Default Market Offer DMO@aer.gov.au

Overview

The Default Market Offer (DMO) came into effect on 1 July 2019. The DMO is a maximum price that retailers can charge electricity customers on default contracts known as standing offer contracts. The AER’s role is to determine the DMO price each year.

The DMO applies to small business and residential customers in areas where there is no other retail price regulation – South Australia, New South Wales and south-east Queensland. The DMO price for each area also acts as a ‘reference price’ for residential and small business offers in that area. When advertising or promoting offer pricing, retailers must show the price of their offer in comparison to the DMO/reference price. This helps customers more simply compare the price of different offers.

The Competition and Consumer (Industry Code – Electricity Retail) Regulations 2019 (Regulations) sets out the legislative framework for the DMO.

Options paper

On 25 October 2021 we published our options paper on the methodology to be adopted for the 2022-23 Default Market Offer price determination (and subsequent years). We have engaged consultants ACIL Allen to support us in implementing the updated methodology for forecasting wholesale and environmental costs.