1 July Energy Price Changes
Major changes to energy price regulations were introduced on 1 July 2019 affecting customers on standing offer rates.
Factors affecting business and residential electricity and gas prices in 2020
Default market offers
Since default offers were introduced on 1 July 2019, energy customers on standing offer flat rate tariffs in New South Wales, South East Queensland and South Australia were automatically switched to lower Default Market Offer (DMO) rates.
A similar price regulation called the Victorian Default Offer (VDO) also applies to small business and residential energy customers in Victoria.
In addition to the introduction of default market offers, retailers are now required to list any discounted plan offers using the default offer price as a 'reference price'. This change will make comparing different retailer market offers and discounts much easier, because the percentage off discount will be calculated against a standard benchmark across different energy retailers.
Has this been a good thing?
According to the AER 2020 state of the market report in the seven months to January 2020, standing offer prices for residential customers fell by 14–19 per cent in Victoria, 11–13 per cent in NSW, 12 per cent in South Australia, and 10 per cent in south east Queensland.
However over a year since DMO and VDO was introduced, we are seeing market offers up to 26% lower, which shows how important it is to shop around to see what rates are available for your home or business.
Wholesale electricity prices
According to the AER wholesale electricity prices have plummeted in 2020 with low fuel prices (particularly low gas prices) led to more capacity offered into the market at low prices.
So what does this mean for customers on a residential or SME energy contract?
Some retailers have increased their rates as at July 1 and some have reduced rates, other retailers have retained their rates but reduced their discounts. To save confusion, the best thing to do is to get a free energy comparison to find out if there is a cheaper rate than what you are paying now from our panel of retailers.
The rising cost of energy was one of the biggest election topics in 2019, with energy minister Angus Taylor threatening Australia's largest retailers with forced breakups and asset divestment in an unprecedented 'big stick' regulation approach.
Still confused on about energy price changes in 2020?
Speak to the energy experts at Make it Cheaper today and we'll help you find out if we can provide you a better electricity or gas deal. Our friendly Aussie based consultants will compare business energy rates from our panel of retailers and assist you to switch to a more competitive plan. We can also do the same for your home energy plan, while our commercial and industrial team is able to assist large commercial energy users.