New format for communicating Retail Pricing Information to energy customers

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There has been strong demand over the last few years for improved customer access to information that will help them meaningfully compare different energy plans and thereby access more affordable energy. In response to this concern, the Australian Energy Regulator (AER) has revised its draft Retail Pricing Information Guidelines (the draft Guidelines) for which it now seeks public feedback. In today’s article, we summarise those draft Guidelines.

Retail Pricing

Reason for change

A range of reviews and consultations over the last few years (including the Independent Review into the Future Security of the National Electricity Market (the ‘Finkel Review’)) have identified that one of the contributors to energy unaffordability for consumers is the difficulty for consumers in working out where they can get a better deal. Consultation on a Customer Price Information issues paper in September 2017 by the AER suggested that the current way in which energy information is communicated to customers is overly complex and confusing.

In response, four key amendments have been proposed in the latest draft Guidelines:

  • Instead of an Energy Price Fact Sheet (EPFS), each energy plan will require two documents known as a Basic Plan Information (BPI) document and a Contract Summary respectively;
  • Changes to the way in which plan information is required to be displayed on websites and in marketing material;
  • New requirements for using language that is clearer and simpler, and
  • Clarification of the definition of a plan that is ‘generally available’.

We consider each of these proposed changes in turn.

  1. Two new documents

The BPI document will be a single page with only the information most relevant for customers in order to compare one plan against others. It will be constructed from plan details provided by retailers to AER’s Energy Made Easy (EME) website.

The Contract Summary document will contain all the detailed information about fees, prices, contract details and eligibility criteria for an energy plan. The format of this document will be similar to the old EPFS.

  1. Marketing and display of energy plan information

It is common in energy marketing to use discounts to attract customers. However, there is no consistency in reference point for those discounts across different retailers. This can confuse customers into signing up for plans that are not the most beneficial for them. In light of this, the draft Guidelines proposes retailers will be required to link customers to the BPI from retailer websites. This will allow for a fair comparison between different deals.

  1. Clear and simple language

Definitions relating to General usage, controlled load and for plans with more than one time of use rates (e.g. on-peak and off-peak) will be introduced in order to ensure consistency across different retailers.

  1. Plans that are ‘generally available’

Currently, retailers are only required to provide information about plans that are ‘generally available’. Some retailers have interpreted this narrowly (e.g. to exclude plans with eligibility requirements) so as to restrict the number of plans that are made available. The draft Guidelines now clarify that this phrase covers a plan as long as that plan is intended to be available to many customers, then it should be included on EME.

To read more go to https://www.aer.gov.au/retail-markets/retail-guidelines-reviews/draft-retail-pricing-information-guidelines-2018. If you wish to comment on the draft Guidelines submissions are due by 16 March 2018.

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