From 1 July 2019, comparing electricity offers in South East Queensland will be easier with new rules on how retailers advertise market offers.
A default market offer (DMO) will be introduced for retail electricity standing offers as recommended by the Australian Competition and Consumer Commission (ACCC) in its Retail Electricity Pricing Inquiry final report. The new default rate will also act as a reference point in advertising.
These reforms aim to improve, among other things, competition and transparency in the retail sector to deliver better price outcomes for consumers and address barriers to effective consumer engagement.
What is the default market offer (DMO)?
New regulations under the Competition and Consumer (Industry Code – Electricity Retail) Regulations 2019 (the Code) set a price cap on standing offer prices and require retailers to use a common reference point to allow for easier comparison of electricity offers.
Electricity retailers operating in South East Queensland will charge the DMO to customers on a standing offer, that is customers who are likely not to have shopped around and switched to a market offer. This impacts about 14 per cent of households in South East Queensland.
The DMO contains a price set by the Australian Energy Regulator and not the retailer. The new price will mean for 2019/20 these households will have lower prices and lower bills (assuming their energy usage is the same as 2018/19).
These changes do not apply to gas prices and do not impact on regional Queensland, that is, the Ergon Distribution area.
Advertising electricity plans
New rules on the advertising of electricity plans will make it much easier for consumers to compare the many and varied plans offered by retailers.
For example, retailers must clearly and conspicuously show all discounts as a percentage off the reference price which is set by the regulator. This means that it will be possible to compare electricity plans in a transparent and meaningful way, or in other words, a 10 per cent discount and a 15 per cent discount will both be off the same reference price. This is an important change that will help to take the confusion out of comparing different offers.
What’s the best way to compare electricity plans?
The most effective way to compare electricity plans is through the Australian Government’s comparison website – Energy Made Easy.