Lower Power Prices For Some But Possibly Not All
Just when you thought you might have the peculiar world of electricity prices sort of understood along comes another mouthful of jargon to mull over.
The good news is that the new Default Market Offer (DMO) might help save 758,000 households some serious money such as $180 a year in some states and they don’t have to do anything.
These are typically the people who despite the entreaties of the FiftyUP Club and others have refused, for whatever reasons, to switch their power and have been slugged with high standing rate offers.
What remains to be seen is if those of us who have switched to discounted market offers will still have access to the same kinds of savings into the future.
The basic idea for a DMO came from the Australian Competition and Consumers Commission (ACCC) report into power prices. It is a standard power price for those not on discounts.
Sorry for more jargon and initials but the Australian Energy Regulator (AER) has had to determine the prices of the DMOs to ensure both consumers are protected and retailers continue to innovate, invest and compete.
That is the balancing act and the projected savings for households which do not engage in the market in NSW, SE QLD and South Australia range between $118 and $181 a year.
For small businesses the annual reduction on the standing offer bill has been put at between about $457- $896.
Victoria has its own scheme just to keep things simple.
The AER says the DMO will be the benchmark from which all discounts must be calculated. The idea is to stop what they call ‘meaningless’ discounts being offered and help consumers compare offers more accurately.
More to the point the advice from the top is still to seek market offers which means shopping around using say government or commercial comparison sites, campaigns such as the FiftyUp Club or simply calling and asking for a better deal.
AER chair Paula Conboy “Market offers are almost always cheaper than the DMO, and shopping around for a deal that best fits the needs of your household or business is the best way to reduce your power bill. Our analysis has shown that calling your retailer and asking for a better deal can deliver real savings.”
There’s no doubt the existing standing offers were not working and a hard rump of consumers and small business for whatever reasons were not playing ball with the market offers.
The changes which the retailers are rushing to bring in by July 1 will certainly help those people but in any such reforms there are usually, whatever the politicians might claim, winners and losers.
In this case it remains to be seen who may be the losers because of the change and by how much.