We appreciate the opportunity to make a submission on the Australian Energy Regulator’s (AER) Default Market Offer Price 2020-21 Position Paper.

There is significant information asymmetry risk in AER pricing decision which have, in the past, been passed through to consumers through higher prices. We believe that the onus should be on the energy companies to offer further reductions in their Default Market Offer (DMO) prices.

The role of the AER should be to robustly test the underlying assumptions in these proposed DMO prices. We have seen assurances from the Federal Minister, the Australian Energy Market Commission (AEMC) and the Australian Competition and Consumer Commission (ACCC) that energy prices are trending down. We anticipate several substantive changes will occur in the market during the 2020-21 period, to further drive down the underlying costs of energy, including the retail costs. The AER’s 2020-21 DMO process should provide further assurance to consumers that the downward trend will continue.

The development and implementation of the 2020-21 DMO is an important opportunity to build on the good steps that have already been taken to improve consumer outcomes. It provides an opportunity for retailers and networks to work together to meet consumer expectations on affordability and to rebuild trust in the sector.

The full submission can be read here.