Default Market Offer prices set to plummet in 2021

Aussies on costly standing offer plans are set to see their power bills fall after the energy regulator released its draft pricing proposal for the Default Market Offer (DMO) in 2021-22.

The Australian Energy Regulator (AER) has released new maximum prices for residential and small business customers across New South Wales, south east Queensland and South Australia, reporting big savings across all regions. And the benefits should be felt by all households, not just those on the most expensive plans.

Based on the AER’s drafted DMO figures, residential customers are tipped to save between $69 and $136 annually, while small businesses will pocket $317 to $577.

AER Chair, Clare Savage, said the DMO is all about capping the prices retailers are able to charge consumers who are left on expensive standing offer contracts.

“Since the introduction of the DMO in 2019, residential and small business standing offer consumers have seen their yearly bills reduce by hundreds of dollars. We have also seen retailer competition remain steady,” Ms Savage said.

“We are now in the process of setting the DMO for the third time and we want to hear from a wide range of stakeholders and consumers in determining our final DMO prices for 2021-22. These are draft prices and are subject to change in the final determination, however we expect customers to continue to see ongoing savings.”

Depending on the region, residential customers will see an annual price reduction of up to 7.9 per cent, while small businesses will save up to 8.5 per cent.

Ms Savage said the DMO’s purpose is to act as a safeguard for customers less engaged in the energy market, but greater savings are on offer to those who shop around.

“It’s also critical for consumers to remember the DMO is intended as a safety net for those who don’t or can’t shop around and it’s not designed to be the most competitive deal,” she said.

“Most retailers have cheaper energy deals on offer, so shopping around remains the best way to get the best price.”

According to the AER, there are more than 720,000 residential and small business customers on standing offers as of September 2020.

The final determination of the DMO is set to be finalised by 30 April 2021, with new prices coming into effect from 1 July 2021.

NSW deals cheaper than the DMO

Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Ausgrid network in Sydney but prices may vary depending on your circumstances. This comparison assumes general energy usage of 3900kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision. The next three tabs feature products exclusively from AGL, EnergyAustralia and Origin.

Here are the AGL Energy plans on our database for NSW. These are products from a referral partner†. These costs are based on the Ausgrid network in Sydney but prices may vary depending on your circumstances. This comparison assumes general energy usage of 3900kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.

Here are the EnergyAustralia plans on our database for NSW. These are products from a referral partner†. These costs are based on the Ausgrid network in Sydney but prices may vary depending on your circumstances. This comparison assumes general energy usage of 3900kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.

Here are the Origin Energy plans on our database for NSW. These are products from a referral partner†. These costs are based on the Ausgrid network in Sydney but prices may vary depending on your circumstances. This comparison assumes general energy usage of 3900kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.

QLD deals cheaper than the DMO

Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Energex network in Brisbane but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4600kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision. The next three tabs feature products exclusively from AGL, EnergyAustralia and Origin.

Here are the AGL Energy plans on our database for SE QLD. These are products from a referral partner†. These costs are based on the Energex energy network in Brisbane but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4600kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.

Here are the EnergyAustralia plans on our database for SE QLD. These are products from a referral partner†. These costs are based on the Energex network in Brisbane but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4600kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.

Here are the Origin Energy plans on our database for SE QLD. These are products from a referral partner†. These costs are based on the Energex network in Brisbane but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4600kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.

SA deals cheaper than the DMO

Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the SA Power network in Adelaide but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision. The next three tabs feature products exclusively from AGL, EnergyAustralia and Origin.

Here are the AGL Energy plans on our database for South Australia. These are products from a referral partner†. These costs are based on the SA Power network in Adelaide but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.

Here are the EnergyAustralia plans on our database for South Australia. These are products from a referral partner†. These costs are based on the SA Power network in Adelaide but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.

Here are the Origin Energy plans on our database for South Australia. These are products from a referral partner†. These costs are based on the SA Power network in Adelaide but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.

Proposed DMO Prices 2021-22

Here are the proposed DMO prices for Aussies on standing offers across each region. Keep in mind for those in NSW, there are three distribution networks so prices will vary according to your location.

Residential customers

State 2020-2021 DMO Prices 2021-22 Draft DMO Prices Annual Savings
NSW (varies across distribution zones) $1,462 – $1,960 $1,372 – $1,849 $90 – $136
SE QLD $1,508 $1,439 $69
SA $1,832 $1,715 $117

Source: Australian Energy Regulator (AER), Draft DMO 2021-22 open for consultation. February 2021.

Small business customers

State 2020-21 DMO Prices 2021-22 Draft DMO Prices Annual Savings
NSW (varies across distribution zones) $6,177 – $8,041 $5,652 – $7,542 $499 – $577
SE QLD $5,760 $5,443 $317
SA $8,305 $7,963 $342

Source: Australian Energy Regulator (AER), Draft DMO 2021-22 open for consultation. February 2021.

Why everyone could benefit from the DMO price drop

Only customers on standing offers, otherwise known as the DMO or reference price, will be directly impacted by these proposed price changes. However, those on market offers could also benefit in the medium to long term as the regulated price cut flows through to the most competitive deals explained Canstar Blue Editor-in-Chief, Simon Downes.

“If you’re one of the few still on a standing offer, now’s the time to review your power plan as there are more competitive deals in your area that you’re simply missing out on,” he said. “Yes, your bills will come down from July thanks to the reduction in the default tariff, but hundreds of dollars could be saved by switching to a competitive market offer.

“The energy market is hugely competitive right now and I would expect the cheapest deals today to get even cheaper in the months ahead so everyone stands to benefit from the reduction in the DMO price. The extent to which you benefit comes down to how proactive you are in shopping around for the best deals.”

Image credits: TM Picture/Shutterstock.com

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