Consumer NZ has a useful price comparison site, Powerswitch, which has been a big help to many consumers who wanted to change retailers. But, it’s not being used as much as we'd hoped. So we thought it was time to take a closer look at why this is. One reason is that some people can’t find the information on their power bill that they need to use Powerswitch.
We’ve teamed up with Consumer NZ on a project to investigate how different retailers present their bills, and work out what needs to change.
What we’ve found so far
First up, we looked at the research that’s been done overseas and the findings are pretty clear. Consumers don't engage with their power bills if they’re too hard to understand. This discourages them from shopping around, so they end up staying with their retailer out of habit. It’s just too hard to change. And if they feel like that, they won’t make the effort to find a power plan that better suits their budget. In other words, they could be missing out on saving money.
In contrast, when power bills are well designed and easy to understand, consumers feel more confident checking out other electricity deals. Consumer NZ thinks if we could increase the number of consumers switching plans by 10%, it could save $70m a year.
The problem is that there is no standard approach to how electricity retailers present the information on their bills. The same information is presented in many different ways, and in many different places. Some key information may not be displayed at all. That makes it much harder to compare plans or use a power switching website.
This problem’s been tackled overseas already. Regulators in the US, Europe and Australia now require retailers to present information on power bills in a consistent way.
We’ve been talking to retailers and gathering examples of their bills so we can compare them. With these bills in hand, we'll work to develop some examples of 'ideal' power bills. We'll test these at focus groups around the country. This will tell us what people do and don't like about them.
We’re hoping to find some innovative ways to simplify and standardise bills. The easier it is for you to understand your bill, the better informed you'll be. You'll also be better equipped to assess whether your current plan is the right one for you or not.
We're already talking to retailers about this, and will work with them on what’s possible. We’ll be encouraging them to make changes to their bills in line with our research. And, we'll talk with the Electricity Authority, our national regulator, about our findings as well.