New CER changes to promote switching will be here in six months
These changes should help consumers when comparing deals
Late last year, the Commission for Energy Regulation announced some proposed changes to its Supplier Handbook, including a requirement for suppliers to display an Estimated Annual Bill in their marketing, to give customers 30 Days’ Notice when their discounted tariff is ending, and to issue an Annual Prompt to customers who have been on the same tariff for 3 years or more.
Now, the CER has published some more information on how each of these things should be implemented by suppliers, and has set a timeframe of six months for suppliers to put these changes in place.
The Estimated Annual Bill (EAB)
The CER has said that the role of the EAB is act as an aid for energy customers when they’re shopping around for energy deals, as well as to ensure consistency across suppliers’ advertising materials.
Today, the CER has announced that suppliers must display the EAB on all marketing and advertisements which promote a specific energy offer, or include any reference to price / tariffs, discounts, savings or cost.
In terms of calculating the EAB, suppliers have to:
- Base it off the updated average consumption figures approved by the CER (i.e. 4,200 kWh per year for electricity, and 11,000 kWh per year for gas); and
- include all energy costs such as unit rate, standing charge, PSO levy, etc.
Suppliers are not allowed to take into account monetary value attributed to non-energy related elements, like loyalty points, non-cash vouchers, or cash-back offers.
And the CER is tackling the issue of ‘small print’, too - it has said the EAB must be displayed in the main body of the advertising or marketing material and is not to be displayed only in footnotes.
30 Days’ Notice:
This new measure aims to address the issue of customers on fixed-term contracts, who roll-over on to standard tariffs at the end of the fixed period. These tariffs can be significantly higher than the discounted deal.
The CER believes that obliging suppliers to provide 30 Days’ Notice before this fixed period ends will give consumers the chance to shop around, either with their current supplier or an alternative, to find the right deal for them.
Switcher.ie has consistently said that this practice would help to drive switching in the energy market - especially since we see much higher instances of shopping around in the insurance market, where customers get renewal notices each year.
With regards to where customers will actually see this notice, the CER has decided that the notice can be presented in a prominent position on the bill or in a separate written communication - yet another reason to always thoroughly check your bills.
The notice must contain:
- The date when the customer’s fixed-term contract is due to expire
- The EAB for the customer’s current energy plan
- Charges currently being paid by the customer (unit rate, standing charge, prepayment rate, etc.)
- The EAB for the customer’s new tariff if remaining as a customer of the supplier
- Text asking customers if this is the right deal for them, and text confirming there are no penalties for switching when the contract is up
Suppliers must also include information on where customers can find out about accredited price comparison websites, like Switcher.ie.
This should allow customers to clearly see the difference between their current and new tariffs, and empower them to shop around for a better deal when their tariff ends.
This is really important when you consider that the difference between the average bill for a gas and electricity customer on standard tariffs and someone on the best deals in the market is €359.
The Annual Prompt:
The aim of this measure is to drive engagement from a sizeable number of customers in the market who have not switched in a number of years.
The CER has said that energy suppliers must prompt all customers, on an annual basis, who have remained on the same tariff for 3 years or more. This prompt will continue to issue every 12 months until that customer has changed tariff.
Again, the CER has decided that the notice can be presented in a prominent position on the bill or in a separate written communication.
With regards to the content of the prompt, it will have to contain:
- A statement that the customer has been on the same energy tariff for the past 3 years or more
- Information on the charges currently being paid by the customer (unit rate, standing charge, prepayment rate, etc.)
- The EAB for the customer’s current energy plan
- Text asking customers if this is the right deal for them, and text confirming there are no penalties for switching when the contract is up, as well as information on where customers can find out about accredited price comparison websites, like Switcher.ie.
All of these changes must be in place within the next six months, and they should really help to drive engagement and competition in the energy market - which is always a good thing!
But you don’t have to wait until then to make an energy switch - compare gas and electricity deals now to see how much you could save.