The Australian Competition and Consumers Commission (ACCC) gave recommendations to the AER to deliver an annual reduction for residential customers.
This will affect customers in New South Wales between the threshold of $129-181, Southern Eastern Queensland customers of $118, and South Australian clients of $171.
The Default Market Offer (DMO) price changes will protect customers who don’t understand the market, while not stifling retailers to innovate and invest, says AER Chair, Paula Conboy.
“Standing offers are no longer working as they were intended and this is causing financial harm to disengaged consumers. Our final decision will bring down bills for most people on those offers,” Ms Conboy says.
Consumer peak body National Seniors Australia has welcomed the AER’s final determination on DMO prices, which will make things easier for seniors looking into a very confusing retail market.
Chief Advocate Ian Henschke says the DMO would benefit older Australians who face poorly regulated standing offers with inflated prices.
“According to the ABS almost 2.6 million Australians do not use the internet, and many are older people unable to shop around,” says Mr Henschke.
“Under the DMO they will no longer be ripped off. Standing offers should have protected people unable to shop around for a better deal but they haven’t.
“That’s why we have been calling for the reintroduction of a regulated price for electricity. As we get closer to the election we urge ongoing bipartisan support for this initiative.”
National Seniors is pushing further forward with the DMO and is asking for election candidates to promise the reintroduction of indexation to the energy supplement to maintain energy affordability for older Australians.
Mr Henschke says that unlike the pension, the Energy Supplement was not increased annually.
“Over time the Energy Supplement will be worthless as a means of assisting pensioners with rising energy prices,” says Mr Henschke.
“Energy costs have jumped 90 percent over the past decade, hitting pensioners on low incomes hardest.
“Indexation was removed in the 2014-15 Budget following the repeal of the so-called carbon tax. If prices go up, the supplement should go up.”