The Australian Energy Regulator (AER) has proposed modest adjustments to the default market offer (DMO), which sets the maximum electricity rate retailers can charge. These changes aim to balance consumer protection with rising costs in the electricity system.
For residential customers in Sydney and South Australia, base rates are expected to decrease by 1.9% to 3%, resulting in annual savings of up to $57. Some households may also benefit from price cuts of up to 7% for controlled loads, such as hot water systems. Small businesses in Sydney may see price reductions of almost 10%.
However, some consumers will experience price increases. Households in South East Queensland may face increases of up to 2.7%, while those in rural New South Wales could see a 0.9% rise, adding up to $53 annually to their power bills.
The AER emphasizes that these changes are subject to consultation and may be revised before a final decision is made in May. The regulator acknowledges that wholesale electricity markets have eased since the 2022 energy crisis, but notes that other costs in the system, such as rising interest rates and inflation, are driving up prices.
Despite the proposed price adjustments, experts caution that electricity prices remain under pressure. The slow decline in prices reflects the economic principle of "rockets and feathers," where prices rise quickly but fall gradually. While some relief is expected, consumers are advised to remain cautious and consider the overall impact of rising costs on their budgets.