We responded to the Australian Energy Regulator’s (AER) Draft Determination on the development of a Default Market Offer price (DMO2) for retail electricity.
We strongly support the principle of a Default Price mechanism but are concerned the current DMO regulating standing offers, and its proposed 20-21 adjustment, do not provide sufficient assurance that people on standing offers are paying a justifiable and fair price.
We note as the DMO is set above the efficient cost of retail services it is doubtful it promotes the interests of consumers in a manner that best achieves the National Energy Objective (NEO) and National Energy Retail Objective (NERO) as effectively as other approaches that are at the AER’s discretion.
PIAC considers that the reasoning behind the formulation of the initial DMO, the assessment of it, and the DMO2 proposed in the draft determination, contain inconsistencies and questionable assumptions.
