Making energy information clearer

Rob Waller: 14 January 2009 in Opinions

Ofgem, the energy industry regulator, recently looked into the state of the energy market, and held a public consultation about their proposals to make it more competitive. Several of these proposals were about improvements to customer information - Ofgem are worried that people find it difficult to switch suppliers because of poor information on bills. At the moment we have to be able to tell the various price comparison websites how much energy we use - which means adding up a series of bills we've received over a year or more. Ofgem propose an annual statement giving this information in one place, with a prompt explaining how to switch.

They also propose an 'easy-to-understand price metric' - this would be a way of comparing tariffs easily, although they don't specify what form it might take. This is an interesting idea that, if it can be made to work, would defeat the efforts by suppliers not be easily comparable on price alone - few of us could easily judge if we are better off with a standing charge of, say, 18.4p a day + 11.6p per kWh, versus no standing charge, with the first 200 kWh charged at 17.3p followed by a charge of 10.1p per kWh.

In our response, the Simplification Centre has suggested an idea to make this even simpler - a simple code, printed on your energy bill, that you could type in to a price comparison site, or quote on the phone. It would work just like the Videoplus codes used to make programming a video recorder easier, containing information about your tariff and your usage that could be decoded by the price comparison website.

An important point we made in our response is that any new information prescribed by regulators must not further complicate the customer experience. Experience in other sectors (for example, consumer credit) shows that legislators don't have a good track record in this respect. We suggest that new forms of customer information should be user-tested to ensure it is likely to be a help not a hindrance.

Links
The Ofgem consultation