A redesign of energy bills to make them easier to understand has seen the Australian Energy Regulator (AER) partner with the Department of the Prime Minister and Cabinet’s Behavioural Economics Team of the Australian Government (BETA).
The Team said the partnership applied behavioural insights to the design of energy bills and its Improving Energy Bills: Final Report would inform the AER’s development of a new Better Bills Guideline.
BETA said the Guideline was the result of a rule change request from the Minister for Energy to amend the National Energy Retail Rules and required the AER to develop an enforceable Guideline to simplify energy bills so households and small businesses could more easily understand their energy usage and costs.
It said the Guideline was also intended to help people find a better energy deal and thereby drive improvements in competition.
BETA said its research focused on three questions, covering bill simplification; how to reduce information overload in bills; and how to maximise peoples’ comprehension of bill content.
“We identified design principles that could aid bill simplification,” it said.
“Use simple language, make the bill attractive, make the key information salient and order the information logically.
“Reducing the amount of content may not be that important for addressing information overload.”
BETA said it found that while simple plan summaries helped consumers to better understand their plan, they did not improve the likelihood that they would choose a better deal.
“There are many costs and barriers to switching,” it said.
“Bills alone won’t solve this problem, but they have a role to play.”
The Team said that in two separate trials, adding a ‘best retailer offer’ to bill prototypes increased respondents’ intentions to switch plans.
BETA’s 73-page Report can be accessed at this PS News link.
