{"id":92674,"date":"2025-06-19T05:39:45","date_gmt":"2025-06-18T20:09:45","guid":{"rendered":"https:\/\/www.solarquotes.com.au\/blog\/?p=92674"},"modified":"2025-06-19T14:29:17","modified_gmt":"2025-06-19T04:59:17","slug":"dmo-electricity-offers-mb3207","status":"publish","type":"post","link":"https:\/\/www.solarquotes.com.au\/blog\/dmo-electricity-offers-mb3207\/","title":{"rendered":"Energy Minister Signals Electricity Offer Shake-Up"},"content":{"rendered":"

\"Federal<\/p>\n

A mechanism ensuring electricity retailers can’t charge some customers as much as they otherwise may isn’t working as intended says Federal Minister for Climate Change and Energy Chris Bowen.<\/p>\n

The Australian Energy Regulator (AER) currently sets the Default Market Offer (DMO) in New South Wales, southeast Queensland and South Australia; while the Victorian Default Offer (VDO) is set by that state’s Essential Services Commission.<\/p>\n

The DMO\/VDO set a maximum price electricity retailers can charge electricity customers on standing offer contracts; i.e. those who don’t take up a market offer for whatever reason. But it also has the effect of setting a benchmark for market offers from retailers. If DMO\/VDO pricing increases, then market offers usually follow suit.<\/p>\n

This isn’t the way things were supposed to be. The DMO, which came into effect on 1 July 2019, was to be a safety net of sorts for some customers while competition between retailers was meant to put downward pressure on market offer prices.<\/p>\n

Last month the final DMO decision for 2025\/26 was announced as was the VDO for Victoria, which will result in electricity price increases from July 1<\/a> across all jurisdictions (again); albeit minimal in the case of Victoria.<\/p>\n

Simpler And Fairer Electricity Offers<\/h2>\n

In his opening address at Australian Energy Week being held in Melbourne this week, Minister Bowen said the vast majority of electricity customers on market offers could be getting a better electricity deal.<\/p>\n

Last year, the Australian Competition and Consumer Commission (ACCC) estimated more than 80% of\u00a0 households in the National Electricity Market (NEM) are paying more for electricity than they need to<\/a>. It’s not chump change \u2014 the ACCC suggested households on offers over 12 months old are paying on average $238 more per year than those on newer offers. And the \u2018loyalty penalty\u2019 further increases with the age of the offer.<\/p>\n

But finding a better deal can require substantial effort on the customer’s side; research that can be time-consuming, frustrating and confusing depending on how it’s approached.<\/p>\n

“It\u2019s difficult to defend the DMO, when the customer is required to do the deal hunting,” he said<\/a>. “We know it could be so much simpler.”<\/p><\/blockquote>\n

Minister Bowen announced that in 2026, the Albanese Government will be delivering a reformed pricing mechanism, designed to get the ‘best deal’ for consumers while still acting as the maximum price retailers can charge for standing offers in DMO regions.<\/p>\n

“The reformed pricing mechanism will bring DMO states closer in line with other jurisdictions like here in Victoria, which this year has seen significantly smaller bill increases compared to DMO regions,” he stated.<\/p><\/blockquote>\n

Minister Bowen says the government will consult on the design with industry. Some of the changes could include:<\/p>\n