DMO protecting disengaged customers

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Australian energy customers who haven’t shopped around will continue to be protected from being charged excessive prices thanks to the DMO, says the Australian Energy Regulator (AER).

The AER has today updated the Default Market Offer (DMO) prices for 2020-21. 

AER Chair Clare Savage said, “We know that customers on standing offers were being charged some of the highest prices in the market. The DMO is designed to protect the 10 per cent of residential and 20 per cent of small business customers on standing offers by setting a cap on what energy retailers can charge them.”

“The DMO is not meant to give these customers the best possible energy price. It simply means their energy provider can’t charge them an unjustifiably high price because they haven’t negotiated a better deal.

“It also acts as a reference price on bills so all customers can easily compare plans with other retailers.”

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The DMO first came into effect in 2019, saving the average residential standing offer customer between $118 to $181 on their annual bill, and $457 to $896 for the average small business customer. 

This year customers will see DMO prices decrease significantly or remain similar in comparison to last year’s DMO, depending on the region.

Ms Savage said while the DMO offers protection, most energy providers have better deals on offer.

“Overall this year’s DMO prices will maintain the significant savings that customers saw in the first year. 

“However don’t underestimate the power of shopping around. I encourage all customers to visit our free and independent Energy Made Easy website to compare offers and find a better energy deal.”

The 2020-21 DMO comes into effect on July 1, 2020.

RegionSavings for average customer in 20192019-2020 DMO prices2020-2021 DMO prices
Residential customers
New South Wales (depending on distribution zone)$129-$181$1,467-$1957$1,462 to $1,960
South-Eastern Queensland$118$1,570$1,508
South Australia$171$1,941$1,832
Business customers
New South Wales (depending on distribution zone)$579-$878$6,204-$8,045$6,177 to $8,041
South-Eastern Queensland$457$6,025$5,760
South Australia$896$9,120$8,305

Note: DMO prices are an annual bill amount based on a set model annual usage level, and are not a ‘maximum bill’. An individual customer’s actual bill will vary depending on how much electricity they use, their distribution region, and how their retailer has set the fixed and variable charges of their standing offer.

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