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 is now squarely focussed on outcomes for consumers, and this process is the first since the changes took place. It’s an important opportunity to set a solid foundation for future determinations that prioritise consumer interests as well as ensuring the DMO does as much as possible to help households deal with the current of cost of living pressures.
That’s why we’re supporting the Australian Energy Regulator’s (AER) intent, while recommending refinements to their approach in our joint response to the AER draft determination for the 2026-27 DMO. These include that the AER:
- Align its methodology for determining each aspect of the DMO with the new consumer-focussed objective, with the Final Determination clearly showing how changes have been made;
- Set the DMO based on the costs of efficient retailers, rather than to reflect the actual costs of all retailers, because we cannot assume that actual costs of all retailers are inherently efficient;
- Continues to use a data-driven approach to determining wholesale energy costs, to avoid over-compensating retailers based on recent price volatility and speculation, and;
- Clearly identifies areas, particularly in relation to the Solar Sharer Offer (SSO) where they expect future determinations to iterate on the basis of improved information.
Read more in our submission on the DMO 8 Issues Paper.
What’s next? The AER will be making its final determination before 1 July 2026, when the new prices become effective. We’ll continue engaging with this yearly process and advocate for further reforms to ensure the DMO is fairly accessible to all who need it, as part of measures to make the energy retail market work better for all consumers.
