The Australian Energy Regulator (AER) has released its issues paper on Default Market Offer (DMO) prices for the 2025–26 period. This regulatory mechanism protects consumers from excessive electricity prices while ensuring that retailers can recover their costs. Introduced in response to Australian Competition and Consumer Commission (ACCC) concerns, the DMO caps prices for standing offer customers in New South Wales, South East Queensland, and South Australia.
Key Updates and Consultations
The AER is considering significant updates to its pricing methodology, including:
- Wholesale Cost Forecasting: Refining methods to incorporate load profiles and assess the impact of solar photovoltaic exports.
- Retail Cost Calculations: Expanding datasets to include smaller retailers for a comprehensive view of retail costs.
- Competition Allowances: Weighing the inclusion of a competition allowance, excluded previously due to economic conditions.
- Network Costs: Factoring in tariff blends that reflect costs for flat-rate and time-of-use customers.