We are setting new standards for bills and marketing materials to help customers navigate the energy market more effectively.
Electricity and gas retail markets review implementation 2018 (bills and marketing)
Draft decision7 September 2018
Submissions closed5 October 2018
Final decision30 October 2018
We have released our final decision document on bills and marketing in relation to recommendations 3F-H from the independent retail market review. Our decision introduces sweeping new reforms that make electricity and gas retailers responsible for helping customers get on to their best energy deals.
Our final decision document
Customers to be informed about best offers and changes that impact bills
These new rules promote transparency by keeping customers informed of changes that affect their bills and whether they could access a better offer from their retailer. Customers will see these changes take effect from 1 July 2019, in the form of a 'best offer' message on their bills, and clear and helpful advice from their retailer about the best energy plan for the customer.
The new rules hold energy retailers responsible for rebuilding consumers' trust and confidence in the retail energy market.
- Dr Ron Ben-David, Chairperson of the Essential Services Commission
We have created three new customer entitlements that will oblige electricity and gas retailers to provide their customers with genuinely helpful assistance in finding the most suitable energy deal for them. Additionally, retailers will also present all prices inclusive of GST to make it easier to compare offers between retailers.
New ways energy retailers will help customers
'Best offer' information for energy consumers
Retailers must tell customers on their bill whether they're on the best energy plan and how much the customer could save by switching, at least quarterly for electricity bills, and at least every four months for gas bills.
Prior warning of bill changes
Retailers will be required to notify customers at least five days prior to price or benefit changes that will affect the customer's bill. When they do this, energy retailers must include a 'best offer' message telling customers whether a cheaper plan is available, and how much the customer could save by switching.
Clear advice before you sign a new energy deal
Retailers will help customers navigate to a product that best suits their circumstances.
Our final decisions explained
Final decision 1: Best offer entitlement
Customers are entitled to be informed via their bill, of the best offer available to them from their retailer. The best offer is determined and presented in accordance with the specifications set out in this final decision.
Final decision 2: The definition of best offer
‘Best offer’ is to be defined as the cheapest offer that is:
- generally available
- does not require paid membership or affiliation as an eligibility criteria
with the retailer having discretion to present cheaper plans from their non-generally available offers.
Final decision 3: Estimating a customer’s usage and the application of discounts and concessions when determining the best offer
The best offer is determined using the customer’s previous 12 months metering data, or if that is not available, the retailer’s best estimate of the customer’s 12 months metering data.
When determining the best offer, the retailer is to apply all unconditional and conditional discounts to the estimates of the customer’s current, and any alternative, offers from the retailer.
When undertaking the best offer calculation, the retailer should not account for savings available on alternative offers if those savings require the customer to bundle their gas and electricity together, or bundle their energy service with another type of service, such as telecommunications services.
When determining the best offer, the retailer is to apply all concessions that currently apply to the customer’s account to the estimates of the customer’s current, and any alternative, offers from the retailer.
Final decision 4: Presentation of the best offer on bills
Where the customer is not on the retailer’s best offer, customer bills are to include a simple message, including a savings estimate, located immediately adjacent to the bill due amount using the words: ‘Could you save money on another plan? Based on your past usage, our [plan name] may cost you up to $X less per year than your current plan.’ The message must also include information on how to contact the retailer to switch.
Where the customer is already on an offer that is as cheap or cheaper than the retailer’s best offer (within the meaning given to that term in the code), customer bills are to include a message confirming this for the customer and referencing the option to visit Victorian Energy Compare to compare offers from other retailers.
Final decision 5: Clear advice entitlement
Customers are to receive a clear advice entitlement to ensure they are made aware of, at the point of entering a contract, the dollar cost implications of all terms and conditions that influence the costs they will face over the term of the contract, and of any other offers the retailer believes may be more suitable for the customer.
Final decision 6: Scope of the new best offer obligation
The best offer obligation applies to:
- bills supplied to small customers (domestic and small business)
- electricity and gas bills
- bills in all formats, including paper and electronic
- communications that accompany a new bill and summarise its key content (bill summaries, in any form), including the amount owing and due date
- bills supplied by holders of a retail licence, but not to bills from holders of an exemption from a retail licence.
The best offer obligation does not apply to multi-site customers.
Final decision 7: Frequency at which the best offer appears on bills
For electricity accounts, the best offer messages are to appear on bills at a minimum every three months. For gas accounts, best offer messages are to appear on bills a minimum of every four months.
Final decision 8: Dollar threshold for determining best offer
To be determined a ‘best offer’, an offer must result in an estimated saving of least $22 (including GST) per year when compared to the customer’s current offer.
Final decision 9: How long a best offer must be valid for
The commission has not prescribed a minimum period for which the best offer must be valid.
Final decision 10: Additional information to appear on bills
All customer bills must also include information about how the customer can access the government comparator website, Victorian Energy Compare (VEC).
Final decision 11: Bill change notices
The existing requirement for retailers to issue benefit change notices is to be replaced by a new requirement to issue bill change notices that are triggered by any price or benefit change.
Final decision 12: Minimum requirements for information to appear on bill change notices
Bill change notices are to include the following information:
- the small customer’s metering identifier
- that the small customer may use the price comparator to compare offers that are generally available to classes of small customers in their area
- the name and web address of the price comparator
- that the customer can request historical billing data (and, if they are being sold electricity, energy consumption data) from the retailer that will assist the customer to use the price comparator to compare offers that are generally available to classes of small customers in their area
- any early termination charges payable under the market retail contract
- the retailer’s best offer for that customer, defined, calculated and presented in the same manner as set out in final decision 2 to 4, 8 and 9
- the retailer’s estimate of the annual dollar impact of the benefit or price change (where the benefit is financial in nature)
- information specific to the customer’s account to assist the customer to complete the fields necessary to compare offers on Victorian Energy Compare
- that a benefit change will occur and the benefit change date (benefit changes only)
- that the customer’s tariffs and charges are being varied (price changes only)
- the date on which the variation will come into effect (price changes only)
- the customer’s existing tariffs and charges inclusive of GST (price changes only)
- the customer’s tariffs and charges as varied inclusive of GST (price changes only)
- clearly indicate that the tariffs and charges are GST inclusive (price changes only).
Final decision 13: Manner and form of bill change notices
Retailers should present bill change notices in a manner and form consistent with the objective of the notice.
Final decision 14: Delivery of bill change notices
Bill change notices are to be delivered by the customer’s preferred form of communication where this has been communicated to the retailer, or otherwise by the same method as that used for delivery of the customer’s bill.
Final decision 15: Scope of bill change notices
Bill change notices apply to both standing offer and market offer contracts, gas and electricity contracts, and price increases and decreases. The notices are not to be applied to exempt sellers at this time.
Final decision 16: Notice period
Retailers must notify customers of a bill change a minimum of five business days before a benefit or price change takes effect.
Final decision 17: Exemptions from the need to issue a bill change notice
Retailers are exempt from issuing a bill change notice under the following circumstances:
- where the customer has entered into a retail contract with the retailer within 10 business days before the price change, and the retailer has already informed the customer of the change
- with respect to a tariff or charge that continually varies in relation to the prevailing spot price of energy
- where the variations to the tariffs and charges are a direct result of a change to, or withdrawal or expiry of, a government funded energy charge rebate, concession or relief scheme
- where the variations to the tariffs and charges are a direct result of a change to any bank charges or fees, credit card charges or fees, or payment processing charges or fees applicable to the customer
- where the change in tariffs or charges is a result of a network business reclassifying the customer and placing them in a different network tariff class, (the retailer is not required to provide advance notice but rather to provide notice as soon as practicable, but in any event no later than the customer’s next bill, of the new tariffs and charges)
- in relation to a benefit change relating to a benefit that is a one-off gift or sign-up credit provided to a customer as a result of entering the market retail contract
- in relation to a benefit change where a benefit change date occurs within 40 business days of the commencement of the market retail contract, or
- in relation to a benefit change where the benefit is rolled over on the same terms and conditions after the expiry of the existing benefit.
Final decision 18: Prices to be expressed in GST inclusive terms only
All tariffs, fees, prices and charges are to be expressed in GST inclusive terms only on bills and related notices, in all marketing material and in any verbal exchange between retailers and customers or prospective customers.
Final decision 19: Commencement date for the new requirements
The Energy Retail Code amendments outlined in this final decision are to commence on 1 July 2019.