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‘Power bills shouldn’t be a riddle’

September 26, 2023
in Business
‘Power bills shouldn’t be a riddle’
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The Consumer Advocacy Council is calling for power bills to include a ‘best plan notice’, which would let customers know if a cheaper plan was available for them, based on the way they consumed electricity.
Photo: 123RF

Requiring electricity retailers to tell consumers if they could save money by switching to a different plan could save people millions, the Consumer Advocacy Council says.

The council is calling for power bills to include a ‘best plan notice’, which would let customers know if a cheaper plan was available, and how much they could save by switching.

Council chair Deborah Hart said a best plan notice would help alert consumers if there was a better plan for them, based on the way they consumed electricity.

“Power bills shouldn’t be a riddle. Retailers should all be helping consumers make better decisions about how they manage their electricity use. There needs to be simple and consistent information displayed on all bills,” Hart said.

A best plan notice for electricity is already required in Australia.

Hart said there was no reason one shouldn’t be required here too.

“Our research found 87 percent of consumers wanted this information on their bills,” she said.

The research found that retailers did not always ensure consumers were on the best plan, nor did their power bills always contain the information they needed.

Hart said if the information on power bills was clearly laid out, it would also allow consumers to compare the plans their power company was offering with those of other power companies so they could make an informed choice about whether they should switch.

Findings from The Electricity Price Review showed retailers could be earning millions of dollars extra every year because customers were not on the cheapest plan for their power use.

“That’s money that should be in consumers’ wallets, not fattening the profits of retailers,” Hart said.

“If, for example, 10 percent of households could save $100 a year by switching to a better plan, that would amount to $20 million transferring from the profits of electricity retailers to the pockets of consumers.”

She said it was even more important in a cost-of-living crisis, when 65 percent of consumers were worried about the impact of power bills on their household budget.

The council has developed a model power bill which sets out the key features that should be prominently displayed.

It includes the best plan notice, customer details, the amount due and when it needs to be paid by, and ways to pay.

“All this information helps consumers better understand their bill and so makes it easier for them to make decisions about switching plans or choosing another retailer. It shouldn’t be confused with other less important information.”

Hart said they now needed the Electricity Authority, as the regulator, to mandate consistent power bills and a best plan notice so all retailers had to adhere to consistent standards.

“We think that will be great for retail competition in the market and it will also be really great for consumers.”

In a statement, Electricity Retailers’ Association of New Zealand (ERANZ) chief executive Bridget Abernethy said the organisation was open to discussions with the Consumer Advocacy Council.

“Retailers design their bills based on insights from their own customers about what works well for them. Some of the Consumer Advocacy Council’s suggestions, while well-meaning, would be very difficult and expensive to implement, which could see the unintended consequence of costs being passed on to consumers.

“Retailers are continually striving to improve consumer care and are open to discussions with the Council should they choose to engage with us.”

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Copyright for syndicated content belongs to the linked Source : RNZ – https://www.rnz.co.nz/news/business/498778/power-bills-shouldn-t-be-a-riddle-consumer-advocacy-group-calls-for-greater-bill-transparency

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