Around 720,000 loyal households and small businesses across Australia are set to receive lower energy bills from July 1, 2020.
The Australian Energy Regulator (AER) has released its final determination for the Default Market Offer for 2020-21, which lock in cheaper electricity prices across south-east Queensland, South Australia, and New South Wales.
The Australian Government introduced the Default Market Offer in July 2019 to protect customers from excessively high standing offer contracts in New South Wales, South Australia and south-east Queensland. It also acts as a reference price to make it easier for customers to compare offers from different retailers.
Minister for Energy and Emissions Reduction Angus Taylor said the Default Market Offer price update was great news for families and small businesses, many of whom will be dealing with the impact of the COVID-19 pandemic.
"Hundreds of thousands of hard-working Australian families and small businesses have already benefited from lower electricity bills since the Default Market Offer price cap was introduced. This update will give welcome relief to loyal energy customers, particularly during the COVID-19 pandemic," Minister Taylor said.
The AER's determination locks in these savings for another year, with average residential customers in South Australia saving an additional $109 a year, while those in south-east Queensland will save an additional $62 a year.
Small business customers will save an additional $815 on average in South Australia and $265 in south-east Queensland.
Prices for customers in New South Wales will decrease in most regions and will continue to remain well below prices from before July 2019, when the Default Market Offer was introduced.
The latest decision means residential customers on standing offers in South Australia and south-east Queensland could save between $590 and $725 a year compared to prices before July 2019, with customers in NSW better off by up to $500 and $666 depending on where they live.
Small businesses customers in South Australia and south-east Queensland on standing offers could save between $2,536 and $2,638 compared to prices a year ago, while customers in New South Wales could save between $2,392 and $2,855, depending on where they are.
"During these tough economic conditions, I am pleased to see the loyalty-tax for electricity consumers is now a thing of the past," Minister Taylor said.
"Loyal customers who find it confusing or hard to navigate energy pricing and discounts, can now be assured they will no longer be taken advantage of by their retailer.
"In June, the Government's Big Stick legislation will also come into force, which will further hold energy companies to account and ensure that substantial reductions in costs are passed through to consumers."
