The peak body for energy retailers and generators, the Australian Energy Council, says the increase to the Default Market Offer (DMO) is a signal to all consumers to review their energy deal.
Each financial year the Australian Energy Regulator (AER) and the Essential Services Commission (ESC) in Victoria set default regulated prices. The AER will increase the Default Market Offer (New South Wales, South Australia and southeast Queensland) by between 7.2 per cent and 14.1 per cent in 2022/23, and the Victorian Default Offer (VDO) will increase by 5 per cent in 2022/23.
"An increase to the DMO is news that most of us could have done without. No one likes to see prices rise, and with the current cost of living pressures, it's important that consumers shop around for the best deal," said AEC Chief Executive, Sarah McNamara.
"Visit compare.energy.vic.gov.au in Victoria and energymadeeasy.gov.au everywhere else to compare your current deal to what's on offer in the market.
"It's also a good idea to contact your retailer and ask them for a better deal", said Ms McNamara. "The same goes if you're concerned about, or are having trouble, paying your bill. Your retailer can help if you contact them.
"Switching retailers will also take less time than you think," said Ms McNamara.
The DMO and VDO are effectively the regulated price caps, while market deals from energy retailers will be more competitive and may save consumers money.
The increase to the DMO reflects pressure on wholesale prices. Factors that influenced the increase include the ongoing war in Ukraine, which has led to significant pressure on coal and gas prices globally; extreme weather in NSW and Queensland which has affected coal supplies and electricity demand; and planned and unplanned outages at power plants.
Wholesale prices can also be impacted by the availability of different types of generation at various times. This can result from plant outages or a lack of resources, such as low wind periods or times of lower availability of sunlight (such as winter and cloudy days), or a combination of these factors.
"Default offers are not the cheapest deal out there, they exist for customers who aren't shopping around for a better energy deal," said Ms McNamara.
"Most people are actually engaging with the market. More than 90 per cent of customers are on market contracts rather than default offers.
"Again, we would say to everyone, look at your energy bill and ask, 'How can I get a better deal?'", said Ms McNamara.
About the Australian Energy Council
The Australian Energy Council is the peak industry body for electricity and downstream natural gas businesses operating in the competitive wholesale and retail energy markets. AEC members generate and sell energy to 10 million homes and businesses and are major investors in renewable energy generation. The AEC supports reaching net-zero by 2050 as well as a 55 per cent emissions reduction target by 2035 and is committed to delivering the energy transition for the benefit of consumers.
