The Australian Energy Regulator (AER) has released its final determination for the 2023–24 Default Market Offer (DMO), under which electricity prices could rise by up to 25% in some parts of Australia.
The DMO is an electricity price safety net that protects consumers from unjustifiably high prices and applies to household and small business customers, on standard retail plans, in South Australia, New South Wales and South East Queensland.
Related article: Regulator warns electricity prices to rise by 20%
The final DMO determination prices vary slightly from the draft announced in March, higher in some regions and lower in others, with wholesale energy costs continuing to be the predominant driver of increased retail electricity prices.
From 1 July 2023 residential customers on standard retail plans will see price increases of 20.8% to 23.9% without controlled load, depending on their region, and between 19.6% to 24.9% with controlled load, depending on their region. Small business customers are facing increases of 14.7% to 28.9%, depending on their region.
Since releasing its draft determination in March 2023 the AER has taken into account stakeholder feedback and has factored in updated wholesale, network, environmental schemes and retail costs, the latest inflation forecasts and reduced the retail allowance in NSW. Governments have also announced electricity bill relief measures for eligible households and small businesses as part of the Energy Bill Relief Plan.
AER chair Clare Savage said, in making its carefully balanced decision, the regulator considered the cost-of-living pressures faced by households and businesses and the need for retailers to recover reasonable costs so they can continue to serve customers.
“We know households and small businesses continue to face cost-of-living pressures on many fronts, and that’s why it’s important the DMO provides a safety net for those who might not have shopped around for a better power deal,” she said.
“In setting the DMO price this year we have sought to protect consumers from unjustifiably high prices and at the same time allow retailers to offer consumers better deals than their standard plans.
Related article: Energy ministers axe Energy Security Board
“No one wants to see rising prices, and we recognise this is a difficult time, that’s why it’s important for consumers to shop around for a better deal by using the free and independent bill comparison website www.energymadeeasy.gov.au and to check rebate and concession eligibility.
“Consumers struggling to pay their energy bills should always contact their retailer as soon as possible because, under the national energy laws, retailers must provide assistance,” Savage said.
