Response to Australian Energy Regulator draft electricity default market offer

The Australian Energy Regulator (AER) today released its draft determination for the electricity default market offer (DMO) for NSW, SA and QLD, which proposes increases between 19.8%-22.2% depending on network area people live in. 

ACOSS CEO, Cassandra Goldie said: 

“In the midst of a cost-of-living crisis, today’s announcement of another increase to electricity prices by the Australian Energy Regulator (AER) is a blow to people across Australia, most of all those on low-incomes, who experienced average 20% rises last year. 

“While the projected increase of between 20 and 22% to the Default Market Offer by the Australian Energy Regulator could have been an even higher increase if not for the Albanese Government energy price cap at the end of 2022, it is still far too high for people on low incomes already struggling with cost-of-living crisis. 

“People on the lowest incomes do not have anything left in their budgets to cut back on and are at breaking point. 

“We are worried about what consequences this leaves for people, including further debt, disconnection, or homelessness. These are unacceptable choices to be made in such a wealthy country. 

“Governments must urgently act to provide relief now and to avoid people on low incomes from experiencing future price increases.” 

ACOSS is calling on: 

  • The Federal Government to update its guidelines to the Australian Energy Regulator to set the Direct Market Offer at an efficient price by lowering retail margins, as is done in Victoria. This would ensure people do not pay more than is required for an essential service. 
  • The Federal Government to lift Jobseeker and related payments to at least $76 a day to ensure that people can cover living costs, and to increase Commonwealth Rent Assistance by 50% to reduce rental stress. 
  • The Federal Government to provide energy debt relief of up to $2,000 per customer in energy hardship via an emergency payment.  
  • Federal, state and territory governments to co-invest in energy efficiency, electrification and solar retrofits for low-income housing and institute mandatory energy performance rental standards. 
  • State and territory governments reform energy concessions to better meet ongoing need, including shifting to percentage-based energy concession, expanding eligibility, and improving access. 

 Notes on the AER draf determination

  1. The AER will consult on the draft determination and make a final determination in May 2023.
  2. The AER DMO applies only to South Australia, New South Wales and Queensland. Victoria determines its own default market offer (VDO), Tasmania and Australian Capital Territory.  
  3.  Proposed residential increases for Ausgrid NSW 22.2%, Endeavour NSW 20.9%, Essential NSW 22.1%, Queensland 19.8%, and South Australia 21.8%.