Australian consumers are currently under immense cost-of-living pressures on all fronts.

For this reason, we are pleased to see the Australian Energy Regulator (AER) acknowledge in this determination, the important role the Default Market Offer (DMO) plays in ensuring consumers have access to an essential service at a fair price.

We are particularly pleased to see the competition allowance left off for this determination, which is in line with what we have called for in previous determinations.

However, there are larger issues, beyond the AER’s jurisdiction, that are impacting the DMO’s effectiveness as either a price cap for disengaged consumers or a reference price.

We maintain that, while there are measures the AER can take to ensure it is protecting consumers in its current form, we need to take a broader look at how the DMO will support consumers in the future energy market.

Our submission highlights evidence that the DMO is not meeting its original intentions. In particular:

• There remains a growing loyalty tax, as evidenced by the number of consumers on plans priced about or equal to the DMO.
• Consumers continue to face barriers to engagement.
• The transitioning energy market is accelerating these issues and creates obstacles to calculating a fair annual price.

Read the full submission here.