Default electricity contracts provide savings
ON July 1 2019 the Australian Competition and Consumer Commission (ACCC) enforced a new Code of Practice for electricity retailers aimed at reducing energy costs for consumers. The Default Market Offer (DMO) was introduced to lower the maximum price that energy retailers can charge customers.
If you signed up to an energy plan that offered discounted rates then you are on what is called a market offer energy plan. These plans offer discounted energy rates for a certain period of time. If you did not sign up to a discounted plan or your discount period has ended then you are most likely on a DMO.
Before the recent changes DMOs were often very expensive, but now households on DMO contracts will save between $130 and $430 a year according to the ACCC’s electricity market report that was published on 16 September.
The DMO has also made shopping around for energy prices much easier. All energy price advertisements must refer to the DMO. So, if you are offered a 10 per cent discount from one energy provider and a 20 per cent discount from another provider, both discounts must be calculated off the DMO ending dodgy pricing advertisements.
The ACCC has stressed that there are many offers available in the market that are cheaper than DMO offers. For NSW residents the online tool Energy Switch found at the link energyswitch.service.nsw.gov.au can be used to compare the prices of other energy retailers in NSW. A similar tool called Energy Made Easy found at the link www.energymadeeasy.gov.au also provides energy comparisons. Unfortunately, not being online makes it difficult to use these computer-based comparisons.
However, with the fairer advertisement regulation in place it has become easier to shop around and find the best deal at a time energy prices are sky high.