The Default Market Offer (DMO) is a critical protection for consumers and an important tool for shaping the retail energy market. Recent reforms mean the DMO’s objective it now squarely focussed on better outcomes for consumers. But less than 6 months since it was launched, we still need time to understand how the changes are working relative to the new objective and whether they are fit to deliver on the intent in the long term.
That’s why we’re recommending the Australian Energy Regulator’s (AER) to revisit its approach in our joint response – with the Australian Council of Social Service and the Queensland Council of Social Service – to the AER Draft Default Market Offer guidelines consultation.
We’re concerned that without more time and good evidence of the outcomes being delivered under the DMO, locking in prescriptive methodology risks committing to approaches that won’t achieve the objective of the DMO. That would mean unnecessary extra costs for consumers.
In our submission we recommend the AER revise the Draft Guidelines to focus on principles and approaches, rather than detailed methodology.
We also highlight instances where the chosen methodology may not actually be aligned with the new objective and recommend alternatives which better protect consumers, and identify areas where more information is required to inform more robust decisions in line with the DMO objective.
What’s next?
The AER is required to publish the Guidelines by 1 Dec 2026. The first test of applying the guidelines will be in the Draft Determination for DMO 27-28 (DMO 9) that should be published in March 2027. We’ll continue engaging with this yearly process and advocate for further reforms to ensure the DMO is fair and accessible to all who need it, as part of measures to make the energy retail market work better for all consumers.
