The Australian Energy Regulator (AER) has released a proposal to cap energy prices in certain circumstances.
The proposal is open for public consultation.
The Default Market Offer (DMO) will set maximum prices for standing offers, acting as a price safety net for those who find pricing and discounts confusing, or who simply don’t have time to negotiate.
The DMO figure will also act as a reference price, requiring energy retailers to advertise their standing and market offers against a common price benchmark.
The Treasurer and Minister for Energy, Josh Frydenberg and Angus Taylor said the draft determination would deliver real savings to customers on standing offers — up to $174 for customers on a flat rate tariff; up to $218 for residential customers on a controlled load tariff; and up to $937 for small business customers on a flat rate tariff.
“The DMO and reference price responds to recommendations made by the Australian Competition and Consumer Commission, and will prevent energy companies from slugging their customers with excessive standing offer rates and benefitting from the confusion created by misleading discounts,” the Ministers said.
Also released for public consultation was the draft Electricity Retail Code to implement the DMO and reference price.
“The code will provide the AER with the power to set the DMO and reference price for households and small businesses in NSW, South Australia and South East Queensland,” they said.
“The Electricity Retail Code strikes the right balance by protecting customers without stifling competition or penalising those who shop around.”
The Department of the Environment and Energy’s 16-page consultation paper relating to the AER proposal, including details on how to provide feedback, can be accessed at this PS News link.
