Energy companies must give consumers offers that are easy-to-understand and easy-to-compare

All offers to consumers for switching energy companies must be easy-to-understand, and consumers must be able to compare these with other offers. Only then will they be able to choose the offer that best meets their needs. “If consumers are able to make well-informed decisions, it generates competitive pressure on all market participants. Providers will then have to do their best in order to attract new customers, but also have to keep doing their best for their existing customers.

This leads to competitive prices, better service, and more innovation,” says Anita Vegter, Member of the Board of the Netherlands Authority for Consumers and Markets (ACM). The document ‘Provision of information in the consumer energy market’ explains exactly what information must be given to customers. ACM has consulted extensively with the energy industry about this document. It is now completely clear to providers in the energy industry what information requirements they must comply with. Enforcement of the compliance therewith will be performed by ACM.

Individual offers

ACM has agreed with the energy providers that, from now on, offers must be tailored to the individual customer’s needs, based on that customer’s actual usage as found on, for example, his annual energy bill. Estimates based on average usage, household size or on property type often differ considerably from consumers’ actual usage. With individual offers, it is prevented that actual costs are completely different from what one would expect based on one’s initial offer. In addition, ACM and the energy providers also agreed to adopt clear terminology, which means that all providers must use the same terms.

The following requirements have also been agreed upon:

• Consumers must be informed in advance about all costs and they need to be included in the offer. This generates a total price with which all offers can be easily compared.
• Providers must state the correct costs for network management, as these vary per network operator.
• When stating the total price, the total annual costs must, in any case, be displayed. As these can also be found on the final bill of one’s current provider, it will  make comparing the different offers easier.
• Tariff changes must be communicated with customers personally and in a timely manner. If customers wish to cancel their contracts following such tariff changes, they should be able to do so in time before the new tariff takes effect. This prevents customers from being switched from a low offer tariff to a much higher tariff without noticing.
• Consumers must be clearly informed about whether they purchase green or brown power.