London, U.K. — (METERING.COM) — October 2, 2009 – Electricity and gas bills can and should be a simple and clear source of information for consumers and the main tool helping them to manage their consumption, understand the actual cost of their energy use, and to compare that with other offers available on the liberalized energy market.
However, many European consumers find their energy bills difficult to understand. In particular, pricing information is often unclear, which makes comparing offers very hard. This may be one of the key reasons why consumers hesitate to switch suppliers, with less than three in five consumers satisfied with their electricity provider, but only 8 percent switching electricity providers in the last two years. Moreover less than half find it easy to compare offers from electricity providers.
This is according to 2nd Citizens’ Energy Forum, which last week endorsed recommendations on billing from a European Commission working group.
The recommendations contain a specific list of items to be included in bills, with key elements required for comparing offers including the duration of the contract and the required notice period for switching suppliers, the customer’s switching code (needed to change suppliers), clear indication of the base price per unit of energy, before taxes and without additional charges, as the main element for comparison between suppliers, and a reference to a clear breakdown of the total price.
These could be included in a “comparability box,” featuring prominently on the bill.
Other recommendations are that bills must be accurate, transparent, and readable, and thus easily understandable, and they should allow consumers to compare offers and help consumers decide to switch supplier when appropriate.
Consumers should be free to choose their billing and payment options, and all bills should contain information about these payment options. Where payment is overdue, reminder bills should inform consumers how to deal with payment difficulties and encourage them to contact their supplier. Suppliers should have procedures in place to find out why a bill has not been paid.
Governments, regulators, industry and consumer associations are invited to take awareness-raising action, to improve consumers’ understanding of energy bills. One example is the use of online energy price calculators managed by independent bodies.
It is noted that bearing in mind the diverse national laws and traditions, and differences between national energy markets in Europe, there is no one-size-fits-all solution as to how to translate the recommendations into concrete deliverables for consumers. Options include a voluntary code of conduct, setting up a bill validation process, and new national legislation. There also needs to be an authority at the national level which is competent to lead a billing review process.
"We want a utility bill to make useful reading for consumers,” said EU Consumer Commissioner Meglena Kuneva at the Citizens’ Energy Forum. “Today, too many European consumers find their bills unreadable and impossible to understand. And too many find themselves unable to switch providers: with all the confusing information they find on their bills, switching becomes mission impossible.”
The Citizens’ Energy Forum, a body created in 2008 to help consumers to enforce their existing EU-wide rights and to provide them with clear, straightforward information on what choices are available to them when it comes to buying their gas and electricity, will monitor progress in adopting billing good practices in Europe.