AGL recently responded to the Essential Service Commission Victoria’s draft decision on the electricity and gas retail markets review implementation 2018 (bills and marketing). This draft decision is the Commission’s response to implementation recommendations 3F, 3G and 3H of the Independent Review of Electricity and Gas Retail Markets Victoria (Thwaites review). These recommendations centred around consistent information for consumers and broadly require:
- 3F –retailers to notify customers in advance of price and benefit changes of the best offer available
- 3G –retailers to include information on a customers bill about the best offer
- 3H –marketing material and bills to provide GST-inclusive pricing.
AGL acknowledges the energy retail market is complex for many customers to navigate which can lead to disengagement and confusion. This can ultimately lead to some customers missing out on the benefits retailers offer. To address this, AGL has embarked on a program to simplify our products and pricing as well as develop tools to help customers better understand their usage. This has included the launch of AGL Essentials (simple low rate energy plan) and Energy Insights which gives customers greater visibility of their home electricity usage.
In support of our initiatives we have also led the charge as the consumer voice in regulatory reform, providing insights and research to regulator and government bodies to help improve consumer outcomes.
AGL consider that these Thwaites reforms have the potential to further improve customer trust if implemented correctly. AGL has experience and has previously successfully used simple and concise messaging to help customers engage and access better offers. Our submission to the Commission draws on our customer insights and experience to provide a framework that is simple, and if adopted by the Commission will help ensure improved outcomes for both the customer and industry.
We have recommended the Commission require a bill message without a proposed future savings as the simplest and most effective way to meet the intention of the Thwaites recommendations to engage consumers. Providing estimates of future savings as proposed by the Commission which are indicative savings based on a number of assumptions that may or may not apply to the individual customer circumstance has the very real risk of confusing or setting false expectations with consumers.
Specifically, we recommend that the Commission consider a message that facilitates retailer and consumer trust, similar to the case study we provide in the attachment below.
This could include messaging such as “we want to put you on a better plan to try and help you save money – contact us to find out more”.
AGL consider the ultimate intention of encouraging customers to engage can still be achieved with this recommendation, and will then allow time for the Commission to work with stakeholders on delivering the ambitious aims of the Clear Advice Entitlement. If not properly considered and scoped, the Clear Advice Entitlement has the potential to have negative impacts on consumers impacting their choice of sales channel and making their experience in trying to switch an incredibly burdensome and time consuming.
We welcome the opportunity to work further with the Commission to ensure the best regulatory solutions are developed and implemented for both consumers and industry.
You can find the full submission here.