The Australian Energy Regulator (AER) and Australian Competition and Consumer Commission (ACCC) on Friday published Testing Comprehension of the Reference Price, research jointly commissioned from the Behavioural Insights Team (BIT). This research provides new insights about the ways consumers understand electricity offers and the AER and the ACCC will use these insights to consider how the presentation of electricity offers could be improved.
AER and ACCC commissioned the research to understand if different explanations and presentations of energy price comparison information would improve consumer comprehension of retail offers. The key findings of the research are that improvements in comprehension can be made by:
- focusing on clear, simple language
- using full sentences rather than compact technical sounding formulations which are hard for non-experts to understand
- using descriptive language such as referring to the reference price as the ‘benchmark price set by the government’
The research will inform the AER’s revision of its Retail Pricing Information Guidelines (RPIG) and the ACCC’s work enforcing the Electricity Retail Code (the Code). The RPIG and the Code each require retailers to present energy price information to customers in a clear and easily understood way, helping them to make better choices about energy offers.
In March 2020, AER noted in its Statement of Expectations of energy businesses: Protecting consumers and the energy market during COVID-19 that its actions to update the RPIG are currently paused in light of the global COVID-19 pandemic and its impact on energy businesses and consumers.
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AER Media Release 26/06/2020 AC 92/20.