Latest news with #DefaultMarketOffer
The Advertiser
2 days ago
- Business
- The Advertiser
Energy price rule changes to limit unfair bill hikes
Energy retailers will be barred from raising bills more than once a year and will be forced to remove unfair fees for vulnerable customers under new rules announced by the market rule-maker. The move will help reduce the complexity and opacity of the poorly understood electricity system, and prevent customers from being ripped off, Energy Minister Chris Bowen said. The changes announced by the Australian Energy Market Commission include preventing retailers from increasing prices more than once a year, banning excessive fees for late payments, and prohibiting fees for vulnerable customers. Retailers must also ensure vulnerable Australians are receiving their best available plan. The changes are intended to clamp down on retailers who lure customers in with cheap deals, only to move them onto higher cost plans or impose hidden fees and charges. "I'm not going to pretend that they're a silver bullet, but clearly, the situation hasn't been working," Mr Bowen told ABC Radio National on Thursday. "There are many, many Australians, either in hardship or not in hardship, who aren't on their best possible plan. That's not their fault. We need to make it as easy as possible for them to change." Research has found about 40 per cent of Australians don't read their energy bill. More needs to be done to ensure time-poor consumers receive their best offer, Mr Bowen said. But it's only part of a broader reform process to make the energy system simpler and fairer, he said. On Wednesday, Mr Bowen flagged tweaks to so-called Default Market Offer rules in a bid to force energy companies to compete harder for customer dollars and prevent unfair price hikes. The regulations were intended to establish a benchmark price to limit price gouging and put downward pressure on prices through competition between energy companies, but were not working as planned, Mr Bowen told the Australian Energy Week conference in Melbourne. Mr Bowen flagged reforms to the Australian Energy Regulator's price-setting mechanism for NSW, South Australia and Queensland to better align with Victoria's rules. The commission's rule changes will be phased in over the course of next year, with the first tranche coming into effect on July 1 2026 and the remaining changes applying from December 30 2026. Energy retailers will be barred from raising bills more than once a year and will be forced to remove unfair fees for vulnerable customers under new rules announced by the market rule-maker. The move will help reduce the complexity and opacity of the poorly understood electricity system, and prevent customers from being ripped off, Energy Minister Chris Bowen said. The changes announced by the Australian Energy Market Commission include preventing retailers from increasing prices more than once a year, banning excessive fees for late payments, and prohibiting fees for vulnerable customers. Retailers must also ensure vulnerable Australians are receiving their best available plan. The changes are intended to clamp down on retailers who lure customers in with cheap deals, only to move them onto higher cost plans or impose hidden fees and charges. "I'm not going to pretend that they're a silver bullet, but clearly, the situation hasn't been working," Mr Bowen told ABC Radio National on Thursday. "There are many, many Australians, either in hardship or not in hardship, who aren't on their best possible plan. That's not their fault. We need to make it as easy as possible for them to change." Research has found about 40 per cent of Australians don't read their energy bill. More needs to be done to ensure time-poor consumers receive their best offer, Mr Bowen said. But it's only part of a broader reform process to make the energy system simpler and fairer, he said. On Wednesday, Mr Bowen flagged tweaks to so-called Default Market Offer rules in a bid to force energy companies to compete harder for customer dollars and prevent unfair price hikes. The regulations were intended to establish a benchmark price to limit price gouging and put downward pressure on prices through competition between energy companies, but were not working as planned, Mr Bowen told the Australian Energy Week conference in Melbourne. Mr Bowen flagged reforms to the Australian Energy Regulator's price-setting mechanism for NSW, South Australia and Queensland to better align with Victoria's rules. The commission's rule changes will be phased in over the course of next year, with the first tranche coming into effect on July 1 2026 and the remaining changes applying from December 30 2026. Energy retailers will be barred from raising bills more than once a year and will be forced to remove unfair fees for vulnerable customers under new rules announced by the market rule-maker. The move will help reduce the complexity and opacity of the poorly understood electricity system, and prevent customers from being ripped off, Energy Minister Chris Bowen said. The changes announced by the Australian Energy Market Commission include preventing retailers from increasing prices more than once a year, banning excessive fees for late payments, and prohibiting fees for vulnerable customers. Retailers must also ensure vulnerable Australians are receiving their best available plan. The changes are intended to clamp down on retailers who lure customers in with cheap deals, only to move them onto higher cost plans or impose hidden fees and charges. "I'm not going to pretend that they're a silver bullet, but clearly, the situation hasn't been working," Mr Bowen told ABC Radio National on Thursday. "There are many, many Australians, either in hardship or not in hardship, who aren't on their best possible plan. That's not their fault. We need to make it as easy as possible for them to change." Research has found about 40 per cent of Australians don't read their energy bill. More needs to be done to ensure time-poor consumers receive their best offer, Mr Bowen said. But it's only part of a broader reform process to make the energy system simpler and fairer, he said. On Wednesday, Mr Bowen flagged tweaks to so-called Default Market Offer rules in a bid to force energy companies to compete harder for customer dollars and prevent unfair price hikes. The regulations were intended to establish a benchmark price to limit price gouging and put downward pressure on prices through competition between energy companies, but were not working as planned, Mr Bowen told the Australian Energy Week conference in Melbourne. Mr Bowen flagged reforms to the Australian Energy Regulator's price-setting mechanism for NSW, South Australia and Queensland to better align with Victoria's rules. The commission's rule changes will be phased in over the course of next year, with the first tranche coming into effect on July 1 2026 and the remaining changes applying from December 30 2026. Energy retailers will be barred from raising bills more than once a year and will be forced to remove unfair fees for vulnerable customers under new rules announced by the market rule-maker. The move will help reduce the complexity and opacity of the poorly understood electricity system, and prevent customers from being ripped off, Energy Minister Chris Bowen said. The changes announced by the Australian Energy Market Commission include preventing retailers from increasing prices more than once a year, banning excessive fees for late payments, and prohibiting fees for vulnerable customers. Retailers must also ensure vulnerable Australians are receiving their best available plan. The changes are intended to clamp down on retailers who lure customers in with cheap deals, only to move them onto higher cost plans or impose hidden fees and charges. "I'm not going to pretend that they're a silver bullet, but clearly, the situation hasn't been working," Mr Bowen told ABC Radio National on Thursday. "There are many, many Australians, either in hardship or not in hardship, who aren't on their best possible plan. That's not their fault. We need to make it as easy as possible for them to change." Research has found about 40 per cent of Australians don't read their energy bill. More needs to be done to ensure time-poor consumers receive their best offer, Mr Bowen said. But it's only part of a broader reform process to make the energy system simpler and fairer, he said. On Wednesday, Mr Bowen flagged tweaks to so-called Default Market Offer rules in a bid to force energy companies to compete harder for customer dollars and prevent unfair price hikes. The regulations were intended to establish a benchmark price to limit price gouging and put downward pressure on prices through competition between energy companies, but were not working as planned, Mr Bowen told the Australian Energy Week conference in Melbourne. Mr Bowen flagged reforms to the Australian Energy Regulator's price-setting mechanism for NSW, South Australia and Queensland to better align with Victoria's rules. The commission's rule changes will be phased in over the course of next year, with the first tranche coming into effect on July 1 2026 and the remaining changes applying from December 30 2026.
Perth Now
2 days ago
- Business
- Perth Now
Energy price rule changes to limit unfair bill hikes
Energy retailers will be barred from raising bills more than once a year and will be forced to remove unfair fees for vulnerable customers under new rules announced by the market rule-maker. The move will help reduce the complexity and opacity of the poorly understood electricity system, and prevent customers from being ripped off, Energy Minister Chris Bowen said. The changes announced by the Australian Energy Market Commission include preventing retailers from increasing prices more than once a year, banning excessive fees for late payments, and prohibiting fees for vulnerable customers. Retailers must also ensure vulnerable Australians are receiving their best available plan. The changes are intended to clamp down on retailers who lure customers in with cheap deals, only to move them onto higher cost plans or impose hidden fees and charges. "I'm not going to pretend that they're a silver bullet, but clearly, the situation hasn't been working," Mr Bowen told ABC Radio National on Thursday. "There are many, many Australians, either in hardship or not in hardship, who aren't on their best possible plan. That's not their fault. We need to make it as easy as possible for them to change." Research has found about 40 per cent of Australians don't read their energy bill. More needs to be done to ensure time-poor consumers receive their best offer, Mr Bowen said. But it's only part of a broader reform process to make the energy system simpler and fairer, he said. On Wednesday, Mr Bowen flagged tweaks to so-called Default Market Offer rules in a bid to force energy companies to compete harder for customer dollars and prevent unfair price hikes. The regulations were intended to establish a benchmark price to limit price gouging and put downward pressure on prices through competition between energy companies, but were not working as planned, Mr Bowen told the Australian Energy Week conference in Melbourne. Mr Bowen flagged reforms to the Australian Energy Regulator's price-setting mechanism for NSW, South Australia and Queensland to better align with Victoria's rules. The commission's rule changes will be phased in over the course of next year, with the first tranche coming into effect on July 1 2026 and the remaining changes applying from December 30 2026.
Herald Sun
3 days ago
- Business
- Herald Sun
Discount power bills: DMO crackdown by Labor will crush small energy retailers
The Albanese government's planned overhaul of household electricity price caps could put small energy retailers surviving on razor-thin profit margins out of business. The electricity industry was reeling at the policy proposal on Wednesday as intermittent coal outages in Victoria this winter stoke wholesale prices, a force that will inevitably be passed through to energy customers. Federal Energy Minister Chris Bowen confirmed the government would review the Default Market Offer (DMO) – the benchmark power price in NSW, Queensland and South Australia – with a view to stripping out allowances that protect retailer margins. The idea is to bring the national standard into closer alignment with Victoria's more tightly regulated counterpart, the Victorian Default Offer (VDO), which will rise by less than 1 per cent in 2024–25. While the move is politically popular amid persistent cost-of-living pressures, it represents a gamble by the re-elected Labor government that could backfire by reducing utility competition as small retailers capitulate under further pressure. 'This is classic Trump-style politics – a distraction tactic,' one senior industry executive said speaking on the condition of anonymity. 'Labor is blaming retailers when even the ACCC acknowledges margins are at historic lows. All this will do is squeeze out smaller operators and reduce competition, with no discernible impact on prices.' The government's intent to unwind some components of the DMO – including retailer cost allowances – has reignited discussion over the true drivers of rising energy bills. Retailers argue the biggest pressure point is not retail margins, but network charges, which account for about 40 per cent of the DMO and are rising as transmission infrastructure is upgraded to support the transition to renewables. Network costs are approved by the government and are the fastest growing component of the DMO. Australian Energy Council chief executive Louisa Kinnear, which represents the country's retailers, said while a review of the DMO was welcome, it must be comprehensive in its scope as far as cost components go. 'Retail competition allowances have already been stripped out of the DMO in the name of affordability. Yet bills are still climbing, and it's not because of retail margins,' Ms Kinnear said. 'Retailers are also required to support customers facing hardship, which often means carrying bad debts. If we want prices that reflect actual costs, all elements of the DMO need to be under scrutiny.' AGL echoed that sentiment, insisting the review should not lose sight of the role of network costs. 'To reduce energy bills, we need to look at the whole picture. The government and industry are actively working on measures to reduce wholesale electricity costs. At 40 per cent of an average bill, network costs are a big component of bills and are continuing to grow quickly. 'A focus on improving network productivity is essential to keep these costs in check. Retail costs only represent around 10 per cent of an average bill and we need to carefully consider any moves that could lessen competition in the retail market, particularly if smaller retailers were no longer able to operate,' a spokesman for AGL said. Victoria, meanwhile, is facing a renewed test of its grid reliability as colder temperatures return and EnergyAustralia's Yallourn coal power station operates at just 25 per cent of its capacity. Yallourn, the state's second largest coal-powered generator, has been crippled by equipment failures, including a collapsed air duct, though the company has not disclosed the cause of outages at two of its four generating units. The outages and cold weather again leave Victoria with little wriggle room. The country's energy market operators expect sufficient capacity to minimise concerns about blackouts, but prices are forecast to surge. Households and businesses, however, do not pay wholesale electricity prices. The disruption is material for EnergyAustralia, which typically uses Yallourn to supply its retail customers and hedge against volatility in wholesale markets. With the coal plant hobbled, the utility is instead relying on more expensive gas peaking plants to meet demand – a margin-eroding outcome that it can only partially mitigate due to benign conditions in the gas market. Gas prices remain elevated but manageable, buoyed by near-record storage levels. However, continued outages at Yallourn could test those assumptions if winter demand intensifies. Originally published as Chris Bowen's default market offer crackdown will crush small energy retailers
West Australian
4 days ago
- Business
- West Australian
Energy minister plugs in for power price cap reforms
Caps designed to protect power users from excessive price hikes are not working as intended and need refining, the federal energy minister will concede in his first major speech since the election. A convincing Labor win also has Chris Bowen hopeful Australia can triumph in its bid to co-host global climate talks and muscle out competitor Turkey, with a decision expected soon. In a wide-ranging address to the Australian Energy Week conference in Melbourne, Mr Bowen will promise changes to the so-called Default Market Offer rules to force retailers to compete harder for customer dollars. "The DMO was intended to act as a benchmark price to stop the worst forms of price gouging, while leaving the job of putting downward pressure on prices to competition between energy companies," he will say on Wednesday. "However, I'll be frank. I don't think it's working that way and reform is needed." In several states, regulators enforce caps on what retailers can charge households and businesses to protect the hundreds of thousands of customers unable or uninterested in chasing a better deal. Caps are reviewed annually to reflect the costs of generation and moving electricity around through poles and wires. In NSW, South Australia, southeast Queensland, it's the independent Australian Energy Regulator's job, while in Victoria, the Essential Services Commission sets benchmark prices. Changes to AER's price cap mechanism have not yet been locked in, but could include clamping down on what retailers can claim back from customers on their bills. Mr Bowen said it was hard to defend price caps when 80 per cent of billpayers could be getting a better deal. "That's why we have work underway to deliver a better regulated pricing mechanism which will put downward pressure on electricity bills and also ensure the energy market better utilises the huge uptake of rooftop solar and batteries," he will say. Mr Bowen will declare Labor's thumping election win as a vote of confidence in its energy and decarbonisation policies. He says it puts Australia in a strong position to secure the rights to co-host the COP31 climate talks alongside Pacific nations. An announcement is possible at the UN climate meetings underway in Bonn, Germany. The bid has come under pressure following the federal government's proposed decision to grant an extension on the North West Shelf gas plant's operating life. The project was singled out by Oil Change International in a report showing the United States, Canada, Norway, and Australia are responsible for nearly 70 per cent of projected new oil and gas from 2025 to 2035.
Perth Now
4 days ago
- Business
- Perth Now
Energy minister plugs in for power price cap reforms
Caps designed to protect power users from excessive price hikes are not working as intended and need refining, the federal energy minister will concede in his first major speech since the election. A convincing Labor win also has Chris Bowen hopeful Australia can triumph in its bid to co-host global climate talks and muscle out competitor Turkey, with a decision expected soon. In a wide-ranging address to the Australian Energy Week conference in Melbourne, Mr Bowen will promise changes to the so-called Default Market Offer rules to force retailers to compete harder for customer dollars. "The DMO was intended to act as a benchmark price to stop the worst forms of price gouging, while leaving the job of putting downward pressure on prices to competition between energy companies," he will say on Wednesday. "However, I'll be frank. I don't think it's working that way and reform is needed." In several states, regulators enforce caps on what retailers can charge households and businesses to protect the hundreds of thousands of customers unable or uninterested in chasing a better deal. Caps are reviewed annually to reflect the costs of generation and moving electricity around through poles and wires. In NSW, South Australia, southeast Queensland, it's the independent Australian Energy Regulator's job, while in Victoria, the Essential Services Commission sets benchmark prices. Changes to AER's price cap mechanism have not yet been locked in, but could include clamping down on what retailers can claim back from customers on their bills. Mr Bowen said it was hard to defend price caps when 80 per cent of billpayers could be getting a better deal. "That's why we have work underway to deliver a better regulated pricing mechanism which will put downward pressure on electricity bills and also ensure the energy market better utilises the huge uptake of rooftop solar and batteries," he will say. Mr Bowen will declare Labor's thumping election win as a vote of confidence in its energy and decarbonisation policies. He says it puts Australia in a strong position to secure the rights to co-host the COP31 climate talks alongside Pacific nations. An announcement is possible at the UN climate meetings underway in Bonn, Germany. The bid has come under pressure following the federal government's proposed decision to grant an extension on the North West Shelf gas plant's operating life. The project was singled out by Oil Change International in a report showing the United States, Canada, Norway, and Australia are responsible for nearly 70 per cent of projected new oil and gas from 2025 to 2035.
