Today’s release of the draft Default Market Offer (DMO) for electricity shows that urgent Government action has helped to shield Australians from the worst energy price rises, but that further action will be critical to help households and businesses – including energy bill rebates.
The DMO, set by the Australian Energy Regulator (AER), is the maximum price that electricity retailers in NSW, South Australia and South-East Queensland can charge customers from 1 July 2023 – with the vast majority, around 90 per cent, on lower rates.
Today’s draft increases are up to 29 percentage points lower than the AER projected in late 2022, more than halving the increase that was expected before the Government acted on skyrocketing coal and gas prices.
This means hundreds of dollars (between $268 and $530) of additional increase avoided for households, and up to $1,243 additional increase avoided for small business customers.
But we know that every increase will still be tough for consumers and small businesses – and that’s why we will continue to work with the States and Territories to deliver energy bill relief in the May Budget.
Russia’s invasion of Ukraine has seen energy costs skyrocket globally, and Australia has not been immune.
Following AER advice last year that the DMO increases would be up to 51% without intervention, ³Ô¹ÏÍøÕ¾ Cabinet agreed a package of urgent actions to take the sting out of energy price rises – including gas and coal price caps.
While the Albanese Government prioritised consumers, businesses and industry, the Liberal/³Ô¹ÏÍøÕ¾s voted against these actions and every dollar of price relief – choosing higher bills over protecting Australians.
Minister for Climate Change and Energy Chris Bowen said while the Energy Price Relief Plan has had a clear impact in shielding Australians from the worst price rises, today’s draft DMO will still be a challenge for Australian families doing it tough.
“The Government, faced with large increases in the DMO, urgently acted to curb spiralling prices of gas and coal and shield Australian families and businesses from the worst of these energy price spikes.
“Despite our distance, Australia has not been immune to the impacts of Russia’s invasion of Ukraine and the biggest global energy crisis since the 1970’s.
“We know there is more to do, which is why our Energy Price Relief Plan also included consumer and small business rebates – additional, targeted assistance to those who need it most.
“And over the medium to long-term, we are driving the transformation to 82% renewables by 2030 with Rewiring the Nation and our Capacity Investment Scheme, because firmed renewable energy is the cheapest form of energy.
“Meanwhile Peter Dutton and the Opposition voted against every dollar of bill relief and to make power bills for families hundreds of dollars higher than they need to be.
“Incredibly, they maintain their opposition to the Government’s Energy Price Relief package even though we know it has significantly mitigated price hikes, including direct targeted rebates for vulnerable customers and small businesses.” said Minister Bowen.
The AER will consult on the draft DMO before releasing the final DMO in May.
Draft Residential DMO
Draft 2023-2024 DMO 5 | November 2022 projected bill increase (no intervention) % | March 2023 projected bill increase (post-intervention) % | Increase avoided | |
New South Wales | $1,847 – $2,555 | +35%-44% / $629-$799 | + 20.9%-22.2% / $335-$463 | 12.9%-23.1% / $268-$416 |
South Australia | $2,241 | +51% / $931 | +21.8% / $401 | 29.2% / $530 |
South-East Queensland | $1,941 | +41% / $665 | +19.8% / $321 | 21.2% / $344 |
Draft Small Business DMO
Draft 2023-2024 DMO 5 | November 2022 projected bill increase (no intervention) % | March 2023 projected bill increase (post-intervention) % | Increase avoided | |
New South Wales | $4,535-$5759 | + 37% / $1,544-$1,709 | +14.7%-19.9% / $640-$858 | 17.1%-22.3%% / $706-$956 |
South Australia | $5,690 | + 53% / $2,394 | +25.4% / $1,151 | 27.6% / $1,243 |
South-East Queensland | $4,115 | + 50% / $1,483 | +19.4% / $669 | 30.6% / $814 |
