Joint media release with Treasurer The Hon. Josh Frydenberg MP

The Morrison Government is continuing to drive down power prices with a price safety net locking in better deals for tens of thousands of small businesses and up to 750,000 residential customers in New South Wales, South Australia and South East Queensland.

The Australian Energy Regulator (AER) has today released its Default Market Offer (DMO) draft Determination for consultation. The DMO will cap prices for standing offers, acting as a price safety net for those who find pricing and discounts confusing, or who simply don't have time to negotiate.

The DMO figure will also act as a reference price, requiring energy retailers to advertise their standing and market offers against a common price benchmark.

The AER's draft Determination will deliver real savings to customers on standing offers:

• up to $174 for customers on a flat rate tariff,
• up to $218 for residential customers on a controlled load tariff, and
• up to $937 for small business customers on a flat rate tariff.*

The DMO and reference price responds to recommendations made by the Australian Competition and Consumer Commission (ACCC), and will prevent energy companies from slugging their customers with excessive standing offer rates and benefitting from the confusion created by misleading discounts.

The Government has also released for public consultation the draft Electricity Retail Code to implement the DMO and reference price.

The Code will provide the AER with the power to set the DMO and reference price for households and small businesses in New South Wales, South Australia and South East Queensland.

The Electricity Retail Code strikes the right balance by protecting customers without stifling competition or penalising those who shop around.

The DMO will not apply in Victoria, after it followed the Morrison Government's lead and announced they will implement their own default market offer. But we have put the Victorian Government on notice: Victorian consumers must be better off under Victoria's default price, or the Commonwealth with take further action to ensure Victorian electricity customers are put first.

For too long, the energy companies have been taking advantage of loyal Australian families and small businesses who have been paying the highest electricity prices on the market.

The Australian Energy Market Commission found an Adelaide family on a standing offer could be paying as much as $832 more per year for their electricity than their neighbour, simply because they've been loyal or haven't shopped around. That is simply unfair.

The Government is removing the energy companies' 'loyalty tax' and delivering lower, fairer prices.

The savings delivered by the DMO builds on the price cuts that the Morrison Government secured from 1 January 2019 of up to 15% for families and small businesses.

Lowering electricity prices is part of the Coalition Government's plan for a stronger economy.

For information on the consultation of the draft Electricity Retail Code, visit environment.gov.au/about-us/public-consultation.

*Reductions are from the median standing offer level, based on a benchmark consumption level relevant to each distribution zone.