Especificaciones Técnicas

3.13. The objectives of our proposals are to:

facilitate greater consumer engagement in the market;

improve the quality of information suppliers provide to consumers; and enable consumers to make well-informed decisions regarding their choice of energy tariff.

3.14. To address our concerns with supplier communications we propose standardising certain elements of bills, annual statements and price increase notification letters49 _as

47 _{Guidance on notification of price increases - Standard Licence Condition 23, 16 August 2011.} 48 _{Lawes Consulting, „Energy bills, annual statements and price rise notifications: advice on the use} of language‟, November 2011, published along side this Consultation.

49 _{As outlined previously in our „Improving tariff comparability‟ chapter, whilst we have not set out} detailed proposals for prescriptive information for contract renewal in this consultation document,

well as tightening the current drafting of relevant licence conditions to clarify our policy expectations. The key features of our „Minded to‟ proposals are outlined in the box below.

Standard Licence Condition 31A – Bills and annual statements

Existing rules regarding information requirements for bills and annual statements will be altered to clarify our policy intent.

For both bills and annual statements key information will be provided using standardised language, and in some cases standardised formats. This will help promote clarity for consumers and foster consumer engagement.

Where possible, standardisation of terminology will be consistent with those prescribed under other proposals, including the „Tariff Information Label‟, price increase notifications and correspondence regarding contract renewals.

Standard Licence Condition 23 – Price increase notifications including notifications for other relevant variations

Suppliers will be required to provide additional information on a notification required by SLC 23, such as the effective date, an estimation of the

monthly/annual future cost of the charge, and a comparison of the new and current charges.

All information must be personalised to the consumer.

Where a notice relates to an increase in the unit rates or the standing charge, suppliers will be required to provide the information that relates to the certain price increase in a standardised table format.

The notice can not contain any additional materials such as marketing materials related to other products or services.

3.15. We tested our proposals for more prescriptive requirements for bills, annual statements and price increase notifications with our Consumer First Panel50 _{including any} elements we propose to standardise.

3.16. During the consultation process we welcome further input on our proposals, and we also plan to seek additional input from experts and consumer groups. The prescriptive format of relevant material has been developed in line with the objectives identified

we envisage that our proposals will be in line with the objectives and proposals for prescriptive information for elements of bills annual statements and price increase notification letters. 50 _{Ofgem‟s Consumer First Panel is a deliberative forum made up of around 100 consumers} recruited across England, Scotland and Wales, chosen to be broadly representative of consumers. The Panel meets regularly to discuss key issues impacting on their participation in the energy market and panellist change every year.

above. Preliminary examples of standardised price increase information on notifications have been provided in Appendix 3 to provide our initial view. Examples of standardised components of bills and annual statements that were tested with consumers will be published shortly after this consultation.

3.17. When developing our proposals we have also considered the potential synergies with other RMR proposals, and wider industry developments. For example, the rollout of smart meters will improve the information available to consumers in the future and Ofgem is considering what consumption and billing information should be made available to consumers in the context of smart metering. Consumer engagement is key to realising the benefits of smart metering; improving customer experience now will facilitate such future engagement. In the future, as the smart metering initiative progresses, there is the potential for the accuracy of information available to consumer and speed of the switching process to improve significantly.

3.18. In addition to our proposals on informational remedies Ofgem has recently announced its proposal to take over the governance of the Confidence51 _{Code from the} Consumer Focus following the Consumer Focus‟s imminent abolition in 2013. This intention was expressed as part of Ofgem‟s formal response to BIS‟s Consumer

Landscape consultation52_{. This code will be an important tool to build consumer trust} and engagement. In our view one of the key benefits of taking over the governance of the Confidence Code is that this initiative will facilitate implementation of the wider RMR package of remedies as well as include future developments such as sophisticated Time of Use tariffs (TOUs) as the smart meter rollout progresses. We note that BIS is

considering its options regarding who should take over the Confidence Code. 3.19. We also plan to further enhance our monitoring efforts regarding supplier

performance. This work will link with BIS Consumer landscape consultation as well as the new powers and duties that the Third Package53 _{has granted us.}

51 _{The Confidence Code is a voluntary code of practice that some online Domestic Price Comparison} sites are accredited to. This code is currently governed by Consumer Focus and provides

consumers with assurances about the information provided when engaging with the market through switching sites.

52 _{BIS recently concluded its Consumer Landscape consultation; among other things this addressed} the continuation of the Confidence Code after the abolition of Consumer Focus (likely to be in 2013).

53 _{The term “Third Package” refers to Directive 2009/73/EC of the European Parliament and of the} Council of 13 July 2009 (Gas Directive) and Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 (Electricity Directive), concerning common rules for the internal market in natural gas and electricity respectively. Article 36 of the Electricity Directive and Article 40 of the Gas Directive impose on the Authority a number of new objectives which relate (amongst others) to ensuring competition and ensuring that customers benefit through the efficient

functioning of the market and consumer protection (now part of Ofgem‟s principal objective under the Gas Act 1986 and the Electricity Act 1989). Article 37 of the Electricity Directive and Article 41 of the Gas Directive give the Authority a number of new monitoring powers (now part of the Gas Act 1986 and of the Electricity Act 1989), including the obligation to monitor the level of

competition and market opening at wholesale and retail levels, prices for household customers, and any distortion or restriction of competition.