The reductions in the Default Market Offer (DMO) for most customers announced today will deliver welcome bill relief, according to the peak body for electricity retailers, the Australian Energy Council.
The AEC's Chief Executive Officer, Louisa Kinnear, also welcomed the Australian Energy Regulator's adjustment to its approach to applying network costs, which are a major part of bills. "The switch to a blended approach in the network cost methodology rather than simply applying the lowest possible network cost across the board is a more realistic reflection on the actual costs to retailers of supplying electricity for all consumers.
"Increasing network costs have been the major change since the draft was released. Overall, wholesale costs have remained relatively stable since the Draft Decision, despite early concerns about the conflict in the Middle East."
Ms Kinnear noted there had been no change to the methodology used for the new Solar Sharer Offer (SSO) and said whilst the AEC continued to support initiatives to that could help improve energy affordability for consumers, the SSO would not suit everyone.
"The SSO remains a complex offer. Some customers who can shift load to the free daytime period day could be better off, but many households who can't do this may find the savings are limited or may actually pay more. It's important to consider if it's the right offer for you and to speak to your retailer.
"The latest changes to the regulated price methodology again impact predictability of the regulatory framework, and it is important that the the AER use the requirement to develop a DMO guideline later in the year to ensure we can have a model that ensures a sustainable retail market. Regulatory certainty and predictability is critical to enable retailers to develop the types of offers that will support a transitioning, two-way energy system."
The Australian Energy Council has also encouraged governments to take further steps to help households. It has released an Affordability Action Agenda that outlines a range of measures government could consider to reduce price pressures.
"In this environment there are also a range of actions and opportunities for government to continue to support customers and reduce cost pressures," Ms Kinnear said.
Ms Kinnear said, "The AEC's Affordability Action Agenda calls for a national review of jurisdictional retail certificate schemes with the aim of simplifying the number of different schemes to further bring costs down.
"In addition, well targeted incentives to encourage customers to electrify their homes, and support for those who can't make the switch would help with home energy bills."
About the Australian Energy Council
The Australian Energy Council (AEC) is the peak body for energy retailers and generators operating in competitive markets.
Our members generate and sell energy to over 10 million homes and businesses and are committed to delivering a reliable, affordable and decarbonised energy system for consumers.
The AEC supports net zero by 2050 and recognises the electricity sector's role in reducing Australia's emissions. Our members are major investors in renewables, firming and storage technologies that are critical to ensuring customers continue to receive reliable and sustainable energy supply as we navigate the energy transition.
