Standing electricity offers will be replaced by a default Market Offer (DMO) with a regulated price for electricity from 1 July 2019.
It is a big win for seniors.
The default offer will essentially serve as price protection for consumers.
Retail consumers in South Australia, South-East Queensland and NSW will have access to the DMO, which aims to protect them from confusing and inflated electricity offers.
|Standing offer customers (June 2018)||Annual savings (estimate)|
|South East Queensland||214,371||$115|
|New South Wales||473,519||$122 - $174|
The new offer replaces existing standing offers which were put in place to protect consumers who were not able to shop around for the best deal when prices were deregulated.
While standing offers provided some consumer protections, such as access to paper billing, retailers were free to set the price, at often inflated levels, to give the appearance they were offering big discounts.
This meant that vulnerable consumers, unable to shop around, who took up standing offers were often on worse deals with higher prices.
We lobbied hard for the reintroduction of a regulated price, arguing to the Australian Competition and Consumer Commission (ACCC) that many seniors struggle to navigate the deregulated market for electricity.
In our submission to the ACCC’s inquiry into electricity prices, we argued that some older people did not have the internet or digital literacy skills required to compare prices and could not be sure they were on the best deal for electricity.
The standing offer, which was supposed to protect vulnerable consumers, has lost its power and needs to be reformed.
That is why National Seniors strongly welcomed the ACCC’s recommendation that government introduce a DMO with a regulated price. We were especially pleased when both the Coalition and Labor agreed to implement this proposal in late 2018.
While the reform is an improvement, it is important to note that the DMO will not necessary offer the best price. However, it will be a reasonable price with basic protections for consumers.
Consumers can still shop around for a better deal if they want. However, now at least, consumers who cannot shop around will be protected.
The DMO and regulated price represents another win for National Seniors and demonstrates how important your membership is. Another great reason to join.
You can check which plan you are on by checking your bill or by calling your provider.
If you are currently on a standing offer, your energy retailer will set your rates in line with the new price cap from that date. You might receive a letter or phone call from your energy retailer advising you of the change.
If you are getting a discount of any kind then you are on a market offer.
Market offers usually expire after 24 months so if you have not reviewed your plan in the last two years, you are probably on a more expensive standing offer.
If you are, you don’t have to do anything as you will be rolled onto the default offer automatically after July 1.
Shopping around for the best market offer may be preferable.
You can visit comparison websites such as Energy Made Easy to find out more about electricity offers.
You can learn more about our Energy Affordability campaign below.