Opportunity to shape energy bills of the future

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On 2 September 2021, the AER made a call for submissions on issues that will inform the AER Bill Contents and Billing Requirements Guideline (Guideline). Submissions are due by Wednesday, 22 September 2021.

The purpose of the Guideline is to provide retailers with guidance on preparing and issuing bills to make it easier for residential and small customers to understand billing information.

The new Guideline will be published by 1 April 2022, and compliance will be mandatory for all retailers. Changes resulting from Guideline will appear on consumer bills from August 2022.

The Guideline development process has been informed by industry research. The AER, in collaboration with the Behavioural Economics Team of the Australian Government (BETA) has released new consumer insights and research about consumer billing comprehension, preferences and behaviours. The research examined over 14,000 Australians and looked at what content should be included on bills, how bills can be simplified, and how bill comprehension can be improved.

Key findings from the BETA research:

  • Length Layout – In general, respondents found bills complex and confusing. However, they found, a short bill is not necessarily the way to reduce complexity and confusion. BETA found no evidence that a well-designed longer bill resulted in reduced comprehension and that further links on bills result in respondents being less likely to find information. Additionally, a definition of technical terms in plain English had no positive impact on respondents.
  • Understanding bill calculations – It was found that alternative formats of detailed charge tables evincing a breakdown of costs did not result in better respondent comprehension. Simple plan summaries were the best performing tool to help respondents understand plans, but respondents did not make better choices after being informed.
  • Switching and market engagement – In a test scenario, respondents were more likely to consider switching their current plan if it was equal to a reference price and less likely if it was below a reference price.
  • Energy usage and solar exports – Energy usage charts worked equally well, irrespective of their format. In relation to solar exports, 87% of consumers owning solar panels said they would benefit from having a new chart showing solar exports on their bill.

The entire report of the BETA research can be found here.

In summary, the findings show that common assumptions on how to increase the comprehensibility of a bill may be inaccurate or lack effectiveness. The call for submissions offers the opportunity to retailers to voice their concerns to the AER, before the Guideline prescribes a mandatory set of rules. Details on how submissions can be made can be found here.

We are excited to hear your views and to assist with submissions where we can.

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