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NewsBiggest Changes to Energy Prices in a Generation on July 1

Biggest Changes to Energy Prices in a Generation on July 1

Electricity relief is on its way for some 758,000 households who are currently stuck on expensive standing offers.  

On July 1 2019 all customers not receiving an electricity discount will be automatically switched to a Default Market Offer (DMO), saving some households between $118 and $181 a year across New South Wales, South-East Queensland and South Australia. Similar changes from July 1 have been announced by the Victorian Essential Services Commission  which will apply to both electricity and gas

The change is one of the recommendations to come out of the Australian Competition and Consumer Commission’s (ACCC) report into power prices.

FiftyUp Club campaigner Christopher Zinn says the reforms will benefit households and businesses who failed to shop around and switch to a market offer.  

“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,” said Zinn.

The default prices will be set annually by the energy regulators not the retailers.

“It’s a balancing act for the AER who wants to ensure both consumers are protected and retailers continue to innovate, invest and compete,” added Zinn.

The AER has designed the DMO to act as a benchmark from which all discounts must be calculated. They want to stop ‘meaningless’ discounts being offered and help consumers compare offers more accurately.  

However, despite the changes the AER reports the vast majority of market offers will still be cheaper than the DMO.

 

Ausgrid

(NSW)

Endeavour

(NSW)

Energex

(SEQLD)

Essential

(NSW)

SAPN

(SA)

% Market Offers below DMO

84%

84%

89%

82%

81%

# Market Offers below DMO

41

42

42

37

35

Source: Residential flat rate, AER Final Determination pg 35

AER Chair Paula Conboy says: “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.”

While Zinn welcomes the reform he says it is still unclear if the changes will bring widespread improvements to the energy market for the majority of consumers.

“The changes which retailers are rushing to bring in by July 1 will certainly help some 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,” said Zinn.

 

Any advice contained in this article is general in nature and does not take into account your particular objectives, personal circumstances or needs. If in doubt about your own situation you should seek appropriate advice.

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BIGGEST CHANGES TO ENERGY PRICES IN A GENERATION. HOW YOU CAN SECURE A GREAT DEAL AHEAD OF JULY 1 SHAKEUP

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Anonymous
Anonymous from VIC commented:

The link to energy offers does not work 

Brian
Brian from NSW commented:

Big Deal !!!! Those well off users that haven't bothered to shop around don't care about price !! The rest of us STILL can't afford the cheapest ???? deals. Still don't get it do they !! 

Anonymous
Anonymous from VIC commented:

Perhaps the FiftyUp club could publish these DMOs. 

Geoff
Geoff from NSW commented:

I think they get a commission for everyone who signs up - so there is no incentive to find "the best deal!" It is more important for them to get the "maximum commission!" Happy to refract this statement if it is proved incorrect!! 

Anonymous
Anonymous from VIC commented:

What a rip off. Thought I would change suppliers. Received a quote of 41% of Power and 28% of Gas. When I mentioned that I had solar panels, the new quote was 16% of power and 28% of gas and 22cpkwh for feed in tariff. Why change when I am receiving 70cperkwh feed in tariff , 34% off power and 34% of gas 

Reginald
Reginald from NSW commented:

Looks like price fixing to me. I thought this is against ACCC laws????? 

Geoff
Geoff from NSW replied to Reginald:

Absolutely need some type of price fixing! My 91 year old father in law was offered a 36% discount offer but when I double checked it for him it cost more than another company offering 10% off. Reason - first company had highly inflated supply and unit charges. Now that should be against the law! 

Geoff
Geoff from NSW replied to Geoff:

Might add that the first offer was through this website! 

Rob
Rob from VIC replied to Geoff:

No surprises here Geoff. This site seems to be constantly falling for large discount figures rather than net figures for power. If in Vic I have found that the Victorian energy compare site is extremely helpfull 

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