Submission to the AER on Default Market Offer Prices 2023-24 Draft Determination

PIAC provided a response to the Australian Energy Regulator’s Draft Determination on Default Market Offer (DMO) Prices for 2023-24. 

PIAC provided responses to the AER in earlier iterations of this process which set out our position on the role of the DMO and made recommendations on how the DMO can be improved to offer better price protection to consumers, and discipline for the retail energy market.

This submission continued the above advocacy, highlighting the urgent need for a review of the DMO due to cost of living pressures and energy price shocks. In particular we:

• Advocated for a more widely applied default offer
• Highlighted inconsistencies and difficulties in accessing publicised market offers, which impacts assumptions underpinning the current DMO methodology
• Challenged the necessity of supporting the profitability of energy market participants with high-than-average costs, arguing this is not in the consumer interest.

For the 2023-24 DMO prices we reiterated arguments made previously including:

• calculating retail allowance as a percentage of the retail cost to serve only
• questioning why metering costs should be regarded as additional to cost to serve