The Electricity Invoice Rubik’s Cube

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One of the few ways that an energy retailer can potentially distinguish themselves is by the way in which they present their electricity invoices. It is a challenging design problem: you have a number of constraints in the regulatory framework and with simple space on the page, you have readers with varying levels of energy understanding, literacy, disabilities, and language proficiency, and you have a lot of information you want to convey. In those states that have adopted the National Energy Customer Framework (NECF), retailers must now comply with the Better Bills Guideline. In Victoria, retailers have more discretion.

The space that is available on an energy invoice is limited, it has always been challenging for retailers to present a simple invoice that not only explains what is payable but also why. Adding requirements for graphs and government messages makes creating a compliant invoice a challenge with very little room for innovation.

The potential for technological innovation is significant. In particular, generative AI could allow retailers to customise invoices for each individual customer. The customer’s preferred language and level of understanding of energy could determine how an invoice is written. Energy insights could be developed for each customer based on the usage data held by each retailer.

Bad examples

You don’t have to look far to find examples of bad electricity invoices. A sample invoice we reviewed, published [still] on the website of a very sizable electricity retailer in Victoria, is the perfect example. Firstly the retailer wasn’t sure what to call the document. The document was labelled an ‘electricity account tax invoice‘, ‘your electricity account‘ and a note was included that ‘This is a statement ONLY for your tax purposes. ‘ The invoice had an identity problem.

The invoice ‘ticked’ most or all of the regulatory boxes but did so awkwardly. For example, trying to fit in start and end reads in white space. If the retailer considered that to be a shining example, one worries about their standards.

The same invoice went on to say ‘Please do not pay the account. The amount mentioned above will be Direct Debited from your account as per the above Due Date.’ If we think that the invoice is confusing, no doubt customers will as well.

What is required

What you see on your electricity invoice will depend on where you live. The following is a summary (not a complete summary) of what invoices are required to contain:

NECF

In those states that have adopted NECF, the Better Bills Guideline dictates the contents of each electricity invoice. The Better Bills Guideline requires energy retailers to include certain information in the bills they issue to small customers. This includes:

Tier 1 information which must appear on the first page of a paginated bill or at the beginning of an unpaginated bill. This includes the customer’s name and address, amount due and due date, bill issue date, payment methods, account number, and contact information. It also includes a link to the Energy Made Easy website and a ‘better offer message’.

The better offer message informs customers if there is a better or lower cost energy plan available to them based on their past usage. If there is, the message must state: “Based on your past usage, our [name of plan] may cost you up to [dollar amount] less per year than your current plan.” It must also state that the information is being provided as required by the Australian Energy Regulator.

If there is not a lower cost plan available, the message must state: “Based on your past usage, you are on the best plan we can offer you.” It must also state that the information is being provided as required by the Australian Energy Regulator.

Tier 2 information includes a ‘plan summary’ outlining key features of the customer’s plan, a bill breakdown explaining how the amount due was calculated, the customer’s average daily usage, a comparison with the customer’s usage in the same period the previous year, and contact information for assistance and interpreter services.

The Guideline also requires that “the information in a bill for a small customer must be presented in a way that is easy to understand” through use of plain language, clear design, graphics, and a logical layout. Bills should be structured to present important information first, with related information grouped together.

The Better Bills Guideline aims to make energy bills easier to understand by standardizing the information provided and how it is presented. The inclusion of a better offer message also helps customers identify if they could save money by switching to a different energy plan.

VIC

The Energy Retail Code requires retailers to include certain information in bills and billing summaries provided to small customers. This includes:

The customer’s details, tariffs, charges, meter readings, and consumption information. Quoting from the code: “A retailer must prepare a bill so that a small customer can easily verify that the bill conforms to their customer retail contract and must include…the small customer’s name and account number; the address of the small customer’s premises…the meter identifier; the billing period; the total amount payable by the small customer, including amounts of any arrears or credits; tariffs and charges applicable to the small customer; the basis on which tariffs and charges are calculated…”.

Retailers must also provide a deemed best offer message to advise small customers if there are lower cost plans available to them based on their usage. Quoting from the code: “A retailer must provide a deemed best offer message on a bill or bill summary to a small customer…If the deemed best offer check result is negative, the retailer must include: a negative deemed best offer message on the small customer’s bill…If the deemed best offer check result is positive, the retailer must include: a positive deemed best offer message on the small customer’s bill…”.

The code then sets out specific requirements for the content and format of the deemed best offer messages. For a negative message, it must state: “Based on your past usage, our [name of deemed best offer plan] may cost you up to [amount] less per year than your current plan”. For a positive message, it must clearly convey that the customer is on one of the retailer’s lowest available plans, refer them to the government’s price comparator website, and may provide the name and web address of the price comparator.

The Victorian requirements aim to provide small customers with the information they need to easily understand and verify their bills, be aware of lower priced plans that may be available to them based on their own usage, and access objective information to compare plans.

How else could we explain usage

The primary purpose of an energy invoice is to explain how much is payable and why. Separately, invoices can be used as a method of communicating when and how customers are using electricity.

The mandatory graphical inclusions are generally uninspiring. For example, in Victoria the following are given as examples of compliant graphs in greenhouse gas disclosures:

What else could we do to convey when and how a customer is using energy? We say you could do something like this:

A heatmap allows a customer to see the change in their pattern of usage by days of the week and over time. From the above, you can clearly see that there is no significant reduction in usage on any one day of the week but that the customer’s energy consumption has increased over time. That could then be explained in written form and translated into energy saving tips. For example:

Clearly, the capacity of a customer to understand the graph and words used needs to be the primary consideration. On a side note: We believe that much more work is needed to regulate how energy retailers ensure that customer’s with a disability are not disadvantaged in the design of systems and processes. Simply proving a phone number for assistance seems inadequate.

What does the future hold

Generative AI has significant potential to customise energy invoices for individual customers. Potentially, an energy retailer could ensure that individual customers’ circumstances are taken into account in all aspects of each invoice.

There is no reason why (soon) customers cannot be sent invoices in a language of their choice, with language that is consistent with the customer’s level of understanding of energy, and with customised energy saving tips determined on the energy consumption data for a customer.

The benefits of integrating generative AI is clear. Sending invoices in a customer’s preferred language would increase the capacity for a large number of consumers to participate more effectively and to take steps to manage their accounts. Of course, confidentiality and data security need to be carefully thought through.

While the technology of generative AI will mature quickly, and make the above possible, the inflexibility of existing energy billing systems and the regulatory framework will be the delay implementation to the disadvantage of customers.

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