Electricity retailers have been slammed by the industry's leading customer watchdog for sending out confusing power bills that make people pay more for electricity than they need to.
The charge came from the Consumer Advocacy Council, which was set up to scrutinise the industry after a sweeping review of power companies in 2018.
In a new report, the council says customers are paying on average $100 a year more than they need to, because they are not given straight forward advice on how they can pay less.
In fact, power companies usually have a variety of charging plans, but these often go unnoticed by the customer.
To resolve this problem, the Consumer Advocacy Council is calling for power bills to have a Best Plan Notice prominently displayed on each person's power bill.
“Electricity retailers and your power bill should help you make decisions to save, not spend,” says the chairperson of the Council, Deborah Hart.
“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 says there is a confusing array of plans on offer to customers, which can be simplified if each bill has a prominent notice showing the best plan, based on that customer's pattern of electricity use.
“Our research found 87% of consumers want this information on their bills."
Hart says a change could put money into consumer wallets, not into the profits of retailers.
“If, for example, 10% of households could save $100 a year by switching to a better plan, that would amount to $20m transferring from the profits of electricity retailers to the pockets of consumers.
“In a cost of living crisis, it’s even more important this happens as we know 65% of consumers are worried about the impact of power bills on their household budget."
Hart says a Best Plan Notice is printed on Australian electricity bills and it can happen here too.
“Right now, retailers are only encouraged to provide this information under the voluntary Consumer Care Guidelines, but they are not required to," she says.
"There needs to be an explicit rule that forces all companies to provide a Best Plan Notice every three months - and penalties if they don’t.
“The Electricity Authority should require this."
A big chunk of the power industry is represented by the Electricity Retailers Association of New Zealand (ERANZ). This includes the large generation/retail companies and well as smaller boutique firms.
Its chief executive Bridget Abernethy says these companies design their invoices 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," she says.
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