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The Default Market Offer (DMO), is the maximum price that electricity retailers can charge for standing offer plans.
The reference price is essentially the same thing, but it helps you compare plans on the market on comparison services and provider websites.
Electricity retailers in New South Wales, South East Queensland and South Australia are required to advertise their plans against this maximum or 'reference' price, making it easier for customers to compare plans from different retailers. The exact reference price depends on where you live.
There are two parts to the reference price: a price cap (the DMO) and new advertising requirements.
The energy regulator has set a price cap for standing offers, meaning retailers can't charge customers more than the reference price for standing offers.
This price cap doesn't apply to customers on market offers. However, market offers often include discounts, special prices and cheaper rates than the DMO.
Energy retailers in New South Wales, South East Queensland and South Australia used to be able to advertise discounts that were calculated from different base rates. This made it challenging to compare discounts from different retailers.
With the new reference price, energy retailers must advertise pricing and discounts in relation to the reference price, leading to more transparent pricing and easier comparison. If two retailers offer 20% discounts, you know the discounts are equivalent because they are calculated from the same base rate.
The first DMO came out in 2019. This year it was reviewed again to reflect changes in wholesale prices and that's why you can find 'DMO 1' and 'DMO 2' below.
Distribution region | Annual usage | DMO 2 Price | Difference to DMO 1 |
---|---|---|---|
Ausgrid | 3,900 kWh | $1,462 | -$5 (-0.3%) |
Endeavour | 4,900 kWh | $1,711 | -$9 (-0.5%) |
Essential | 4,600 kWh | $1,960 | +$3 (+0.2%) |
Energex | 4,600 kWh | $1,508 | -$62 (-3.9%) |
SAPN | 4,000 kWh | $1,832 | -$109 (-5.6%) |
Distribution region | Annual usage | DMO 2 Price | Difference to DMO 1 |
---|---|---|---|
Ausgrid | General usage 4,800 kWh + CL 2,000 kWh | $2,024 | -$35 (-1.7%) |
Endeavour | General usage 5,200 kWh + CL 2,200 kWh | $2,165 | -$1 (0.0%) |
Essential | General usage 4,600 kWh + CL 2,000 kWh | $2,356 | -$19 (-0.8%) |
Energex | General usage 4,400 kWh + CL 1,900 kWh | $1,812 | -$115 (-6.0%) |
SAPN | General usage 4,200 kWh + CL 1,800 kWh | $2,244 | -$176 (-7.3%) |
Distribution region | Annual usage | DMO 2 Price | Difference to DMO 1 |
---|---|---|---|
Ausgrid | 20,000 kWh | $7,240 | -$131 (-1.8%) |
Endeavour | 20,000 kWh | $6,177 | -$27 (-0.4%) |
Essential | 20,000 kWh | $8,041 | -$4 (0.0%) |
Energex | 20,000 kWh | $5,760 | -$265 (-4.4%) |
SAPN | 20,000 kWh | $8,305 | -$815 (-8.9%) |
The reference price and DMO are often used interchangeably, since both terms refer to a single price, as explained above. Reference price is used for either case, while the DMO mostly refers to the price cap on standing offers.
If you live in New South Wales, South East Queensland or South Australia, it might affect you. Victorian customers may be affected similarly by the Victorian Default Offer.
There are two different types of electricity plans in Australia: standing offers and market offers. It only directly affects standing offer customers.
Almost 800,000 residents in New South Wales, South Australia and South East Queensland are on standing offer electricity contracts. If you were on a standing offer when the new regulations took effect, you might have seen an adjustment in your rates. If you have since joined a standing offer, you can be assured your rates won't exceed the max set by the DMO.
If you're on a market offer, the DMO doesn't directly apply to you. However, retailers show the difference between their plans and the reference price. For example:
Plan 1 | Plan 2 | Plan 3 |
---|---|---|
5% less than reference price | 10% less than reference price | 15% less than reference price |
Keep in mind, while the reference price helps you compare plans and providers, you might end up paying more or less than the advertised rate depending on your usage.
How to switch energy providers
If you're comparing energy you may have come also across the following terms: Standing offers and Market offers. Our infographic below helps explain the difference.
Picture: GettyImages
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