According to Chris Bowen, the incoming energy minister, the previous government’s actions caused millions of Australian homes to face additional cost-of-living pressures due to rising electricity costs. The Australian Energy Regulator has raised the DMO (Default Market Offer) for the coming financial year, resulting in higher electricity prices for residents.
Mr. Bowen blamed the Morrison administration for the higher prices, claiming that a lack of funding for renewable energy that has lower costs was to blame. “The cost of 9 years of Liberal refusal and delay is being incurred by the Australian public, by Australian households, in higher energy costs,” he added.
“They made it via the whole election campaign without saying anything false. They sat on the report and agreed to postpone it until after the election.” While Mr. Bowen acknowledged that international constraints on coal and gas prices influenced prices, he claimed that the previous government should have spent more.
“However, the truth remains that Australians are spending more for power than they should be because of a lack of energy policy, lack of funding in new energy, lack of investment in renewables, and lack of transmission over the previous nine years,” he added.
Mr. Bowen claimed that the new Labor administration was dedicated to more investment, with the goal of converting the electricity grid to 82 percent renewables by 2030. “The great news is that now the Australian government has announced a plan to lower electricity bills by investing in renewable energy, which is the cheapest source of energy.” Mr. Bowen stated, “That is the best tidings for the Australian people.”
The DMO is a “safety-net” pricing cap on how much power retailers can charge clients who haven’t looked for a better offer and are sticking with their current plans. In New South Wales, the DMO will rise between 8.5 and 14.1 percent in July, 11.3 percent in southeast Queensland, and 7.2 percent in South Australia.
The adjustments will take effect on July 1 and are likely to increase electricity bills by $119 to $227 for NSW residents, $165 for Queenslanders, and $124 for South Australians. Small firms will be struck even harder since the DMO in NSW is expected to jump between 10% and 19.7%, 12.8 percent in Queensland, and 5.7 percent in South Australia.
Energy wholesale prices for retailers in 2021 climbed by 41.4 percent in NSW, 49.5 percent in Queensland, and 11.8 percent in South Australia, according to the AER, due to cutbacks in thermal generation caused by unforeseen outages and higher gas and coal prices.