ACCC Default Market Offer Guide needs to be clear for customers and retailers

AGL recently responded to the Australian Competition and Consumer Commission’s (ACCC) draft Guide to the Electricity Retail Code for implementing the Default Market Offer (DMO).

The Australian Energy Regulator (AER) has been given the power to set maximum standing offer prices for electricity supplied to small customers and require electricity retailers to discount all their offers from a reference price set by the AER. The Competition and Consumer (Industry Code – Electricity Retail) Regulations 2019 (the Regulations) gives effect to these recommendations.

While we do not support the re-regulation of retail electricity prices because of the potential long-term impact it could have on retail competition and customers due to the regulatory risk that it introduces into the market, we do strongly support the use of an effective price comparison that provides greater clarity for customers and minimises the potential for customer confusion.

The ACCC draft Guide is designed to help electricity retailers understand their responsibilities under the Code and offers guidance on:

  • which retail electricity offers are covered by the Code
  • how the cap on standing offer prices works
  • how offers must be compared to the reference price
  • how conditional discounts can be advertised
  • pricing and advertising requirements that operate concurrently with the Code
  • the consequences of non-compliance with the Code.

In our submission, we note our practical concerns with the Code and draft Guidelines to highlight areas that could benefit from additional information and interpretation from the ACCC. In remaining silent on complex scenarios there is a risk of inconsistent application by retailers leading to potentially poor outcomes for customers.

We encourage the ACCC to consider all regulatory obligations on the retailing of energy and provide guidance that results in a clear and transparent customer communication.

Our full submission can be read here.

Our previous submission to the AER on the Code can be accessed here.