Only 15 per cent of households in NSW, 16 per cent of customers in Queensland and 9 per cent of South Australians are on standing offers.
For small business customers on standing offers in NSW, they could see savings of between $579 and $878 depending on their network zone, about $457 for south-eastern Queensland businesses, and approximately $896 for consumers in South Australia.
In NSW, almost a quarter of small businesses are on standing offers, with 27 per cent on non-discounted offers in south-east Queensland and 16 per cent on these offers in South Australia
The prices have been set at the mid-point between the median discounted and standing offers in each area. It will also act as a comparison price for discounted offers.
Victoria is bringing in its own regulated price which could cut power bills for around 150,000 households.
This default market offer (DMO) was implemented after an Australian Competition and Consumer Commission (ACCC) electricity review found the market was broken, and that retailers offered deliberately confusing discounts and had high standing offers that effectively punished households for not shopping around for better deals.
“We had to bring in the DMO to deal with the unjustifiably high standing offers and to set a reference price against which discounts can be calculated,” Ms Conboy said.
“We’ve been mindful in setting the DMO in a way that didn’t impede innovation or risk discounts.”
Concerns were raised that if the new regulated power price was set too low then electricity retailers could cut discounts to recoup losses.
Federal Energy Minister Angus Taylor said a regulated power price could stop consumers being hit with high electricity costs.
“The DMO and reference price were recommendations of the ACCC, and will prevent energy companies from slugging their customers with excessive standing offer rates and benefitting from the confusion created by misleading discounts,” Mr Taylor said.
“The ACCC will also be watching retailers to ensure they provide their customers a fair deal and not increase better offers to offset the loss of their excessive margins from standing offer customers.”
Consumer comparison group Canstar’s Simon Downes said the DMO is good news for households but they should not stop shopping for the best deals.
“It’s important that consumers don’t just bury their heads in the sand because they have heard about a new default offer and assume they are now getting a great deal,» Mr Downes said.
Origin and AGL have opposed the DMO, calling them confusing for customers.
Covering energy and policy at Fairfax Media.