Spot Check of Energy Supplier Compliance - Commission for ...
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An Coimisiún um Rialáil Fóntais Commission for Regulation of Utilities
An Coimisiún um Rialáil Fóntais
Commission for Regulation of Utilities
Spot Check of Energy
Supplier Compliance
Q1, 2021
Information Paper
Reference: CRU/21100 Date Published: 23rd August 2021 Closing Date: n/a
www.CRU.ie
0An Coimisiún um Rialáil Fóntais Commission for Regulation of Utilities
Executive Summary
The Commission for Regulation of Utilities (CRU) conducts regular spot checks on energy supplier
compliance with the requirements contained within the Electricity and Natural Gas Supply
Licences. The Q1 2021 Spot Check focused on supplier compliance with requirements of the
Household Code of Practice on Marketing and Advertising1, specifically those concerning the
accuracy of the Estimated Annual Bill (EAB) and tariffs. The spot check took place between the
29th – 31st March 2021 and was conducted remotely through an analysis of suppliers’ websites.
This area was selected for analysis given the important role of suppliers’ websites in providing
information for customers and, particularly through the presentation of EABs, in allowing customers
to compare the offerings of different suppliers. Correct and complete information enables
customers to make informed switching decisions and can help customers save significantly on
energy costs. A previous spot check found a high number of non-compliances in this area.2 Since
the last spot check on this area, a number of newly licensed suppliers have entered the market,
while some additional smaller suppliers are subject to this spot check.
The spot check evaluated the compliance of 14 licenced gas and electricity suppliers with specific
requirements found under Sections 2.2 (General Requirements), 2.3 (Presentation of Information
on Marketing and Advertising Material) and 2.5 (Presentation of Information on Tariffs) of the
Household Suppliers’ Handbook.
The Q1 2021 spot check has identified 14 non-compliances across eight of the 14 suppliers
audited. Most findings relate to Requirement 2.2.4(a), which states that suppliers must ensure that
the information provided to customers is easy to understand, complete, accurate, transparent and
not misleading in terms of information that is provided or omitted.
Further findings were identified in relation to Requirement 2.3.3(e)(i), which relates to the
positioning of the EAB, Requirement 2.5.4 which relates to suppliers’ obligation to show the EAB
associated with each tariff and Requirement 2.5.5 which outlines that discounts must be set out
clearly in cent per kWh.
The CRU is disappointed in the number of non-compliant findings identified across suppliers.
Issues relating to the accuracy of information presented on suppliers’ websites were previously
highlighted by the Q3 2019 Spot Check of Energy Supplier Compliance (CRU/20032R). Some
1
CRU19138-Electricity-and-Gas-Suppliers-Handbook-2019-.pdf
2
The Q3 2019 spot check (CRU/20032R) identified 52 non-compliances across nine suppliers.
1An Coimisiún um Rialáil Fóntais Commission for Regulation of Utilities suppliers have had non-compliances in both spot checks which suggests that they have not effectively addressed deficiencies in the accuracy of information presented to customers. Inaccuracies presented on suppliers’ websites are unacceptable due to the potential to cause customer harm. The CRU is particularly concerned by a non-compliant finding against two suppliers, in which the published Estimated Annual Bill figures underestimated how much a typical customer would pay. It is important that suppliers comply with the conditions of their licences to ensure a high level of protection for all energy customers. The CRU has followed up with suppliers to ensure actions are completed to address these non- compliant findings. At the time of publication all issues had been remedied by the relevant suppliers. 2
An Coimisiún um Rialáil Fóntais Commission for Regulation of Utilities
Public / Customer Impact Statement
It is a function of the CRU to ensure a high standard of protection for final customers in the electricity
and gas markets. The CRU does this by ensuring that suppliers comply with the conditions of their
licences3.
The Suppliers’ Handbook contains the minimum service requirements that all licensed energy
suppliers must adhere to in their dealings with energy customers. The minimum requirements are
set out in a series of Codes of Practice (CoPs) which describe all aspects of the customer journey
from advertising and customer sign-up to billing, complaints and disconnection, for both non-
household and household customers, including vulnerable customers.
In line with its Compliance Policy Statement4, the CRU conducts regular spot checks on supplier
compliance to ensure energy consumers are adequately protected in all aspects of consumer
interaction with energy suppliers.
The Q1 2021 Spot Check focused on supplier compliance with certain requirements of the
Household Code of Practice on Marketing and Advertising, specifically those concerning the
accuracy of the Estimated Annual Bill (EAB) and tariffs.
During the spot check, the CRU found a number of non-compliances by suppliers. The CRU has
followed up with suppliers to ensure that these issues are addressed.
3
Electricity Regulation Act (1999), as amended; Gas (Interim) Regulation Act (2002), as amended
4 CRU/19134 – Compliance and Enforcement Policy Statement
3An Coimisiún um Rialáil Fóntais Commission for Regulation of Utilities
Table of Contents
Table of Contents ...................................................................................................... 4
1. Introduction ........................................................................................................ 5
1.1 Background ........................................................................................................................ 5
2. Methodology ...................................................................................................... 6
2.1 Scope ............................................................................................................................ 6
2.2 Approach ...................................................................................................................... 6
3. Findings .............................................................................................................. 8
3.1 Approach ...................................................................................................................... 8
3.2 Conclusions ................................................................................................................... 9
4. Next Steps ........................................................................................................ 10
Annex 1 ................................................................................................................... 11
Annex 2 ................................................................................................................... 12
4An Coimisiún um Rialáil Fóntais Commission for Regulation of Utilities
1. Introduction
1.1 Background
The CRU is Ireland’s independent energy and water regulator. The CRU was established in 1999
and has a wide range of economic, customer protection and safety responsibilities in energy. The
CRU is also the regulator of Ireland’s public water and wastewater system. Our mission is to protect
the public interest in water, energy and energy safety.
The CRU (in its 2019-2021 Strategic Plan)5 has committed to continue strengthening its
compliance and enforcement framework to ensure best regulatory practice in all areas of the
organisation’s remit.
Suppliers are obliged through Section 14 of the Electricity Regulation Act (1999), as amended, and
Section 16 of the Gas (Interim) Regulation Act (2002), as amended, to comply with the conditions
of their licences. The CRU conducts compliance monitoring of suppliers in this regard.
The Q1 2021 spot check focused on the Code of Practice on Marketing and Advertising. Under
Condition 18 of the Electricity Supply Licence and Condition 21 of the Natural Gas Supply Licence,
licensees must submit Codes of Practice to the CRU for approval. These Codes of Practice cover
all aspects of a consumer journey, from sign-up and marketing, to switching supplier or reaching
a payment plan.
Requirements from the Code of Practice on Marketing and Advertising specifically relating to the
accuracy of tariff and EAB information advertised on suppliers’ websites were selected as the focus
for the Q1 2021 spot check due to the importance of correct and complete information to enable
customers to make informed decisions, including on switching energy supplier, which can help
customers save significantly on energy costs.
This area was subject to a previous spot check in Q3 2019, which identified a significant number
of non-compliances6. There are an additional five suppliers included in the Q1 2021 spot check
which were not included in spot check undertaken in Q3 2019. This covers a mixture of new
suppliers entering the market and some smaller suppliers who were not subject to audit in 2019.
5
CRU/19030a and CRU/19030b – CRU Strategic Plan 2019-2021
6
CRU20032R-Spot-Check-of-Supplier-Compliance-Q3-2019.pdf
5An Coimisiún um Rialáil Fóntais Commission for Regulation of Utilities
2. Methodology
2.1 Scope
A range of requirements of the Code of Practice on Marketing and Advertising were assessed in this
spot check. These include:
• Suppliers’ obligation to provide easy to understand, complete, accurate, transparent and not
misleading information to customers.
• The EAB must include all energy costs but exclude monetary value attributed to non-energy
related elements (e.g. cash-back offers).
• The EAB must be provided for each specific tariff, including for rural customers and those
with a day/night meter.
• Suppliers’ obligation to display tariffs inclusive and exclusive of VAT on a per unit basis.
• Where a day/night tariff is displayed, suppliers should make the number of day and night
units clear.
The full list of assessed requirements is included in Annex 1.
Fourteen suppliers offering household tariffs were included in this spot check; these are outlined
below.
1. Bord Gáis Energy
2. Bright Energy
3. Community Power
4. Ecopower
5. Electric Ireland
6. Energia
7. Flogas
8. Glowpower
9. Iberdrola
10. Panda Power
11. Pinergy
12. PrePayPower
13. SSE Airtricity
14. Waterpower
2.2 Approach
6An Coimisiún um Rialáil Fóntais Commission for Regulation of Utilities
The spot check was carried out remotely between 29th-31st March 2021. During the spot check, each
supplier’s website was assessed in line with the requirements in Annex 1, where;
• All combinations (e.g. 24hr / day/night, urban/rural) for each tariff were reviewed.
• Calculations were carried out based on the tariff components advertised by suppliers to
ensure consistency with the EAB advertised.
Following the spot check, the CRU contacted those suppliers with non-compliances found. A period
of one week was given to suppliers to allow for any objections or representations and certain remedial
actions were requested.
7An Coimisiún um Rialáil Fóntais Commission for Regulation of Utilities
3. Findings
3.1 Approach
Of the 14 suppliers assessed, seven were found to be non-compliant in at least one requirement.
The table below summarises the findings per supplier. Full details of all non-compliances found with
the Code of Practice are provided in Annex 2.
Supplier Electricity/Gas Requirement7 Finding
1. Community Electricity 2.2.4(a) Incorrect unit used
Power
Electricity 2.2.4(a) Incorrect breakdown for day/night
EAB calculations
2. Ecopower Electricity 2.3.3e(I) EAB is not in a prominent position
Electricity 2.5.4 EAB not provided for each tariff
3. Electric Electricity and 2.2.4(a) Price breakdown incomplete
Ireland Gas
Electricity 2.2.4(a) Inaccurate footnotes
4. Glowpower Electricity 2.2.4(a) Inaccurate EABs (appears more
expensive than calculated value)
Electricity 2.5.4 EAB not provided for each tariff
Electricity 2.5.5 Tariff unit information not provided in
cent per kWh.
5. Panda Power Electricity and 2.2.4(a) Inaccurate EABs (appears less
Gas expensive than calculated value)
Electricity and 2.5.4 EAB not provided for each tariff
Gas
6. Pinergy Electricity 2.2.4(a) Inaccurate EABs (appears less
expensive than calculated value)
7. Waterpower Electricity 2.2.4(a) Incorrect unit used
7
CRU19138-Electricity-and-Gas-Suppliers-Handbook-2019-.pdf
8An Coimisiún um Rialáil Fóntais Commission for Regulation of Utilities
Electricity 2.2.4(a) Incorrect breakdown for day/night
EAB calculations
Table 1 – Summary of findings by supplier
3.2 Conclusions
Following the spot check, suppliers were notified of the findings. No objections or representations
from suppliers were received by the CRU. Suppliers were given three weeks to complete all
remedial actions to address the non-compliant findings.
The CRU has followed up with suppliers to ensure that all actions have been completed.
9An Coimisiún um Rialáil Fóntais Commission for Regulation of Utilities 4. Next Steps The CRU has followed up with suppliers to ensure all actions are completed to address the issues identified in the findings. There are no further remedial actions outstanding in relation to this spot check. The CRU intends to continue conducting regular compliance spot checks to ensure a high standard of protection for all energy customers. The launch of smart tariff options to the market may be considered in a future spot check. 10
An Coimisiún um Rialáil Fóntais Commission for Regulation of Utilities
Annex 1
Requirement Assessed requirement
Suppliers must ensure that the information provided to customers is easy to
2.2.4a understand, complete, accurate, transparent and not misleading in terms of
information that is provided or omitted.
The EAB must be based on updated average consumption figures approved by
2.3.3c
the CRU (ToU tariffs do not need to have an EAB yet).
The EAB must include all energy costs such as unit rate, standing charge, PSO
2.3.3c
levy, etc.
The EAB must not include monetary value attributed to non-energy related
2.3.3c elements by suppliers, their representatives or third-parties e.g. loyalty points,
non-cash vouchers, cash-back offers, etc.
Where a specific tariff is presented / referenced, the EAB must be calculated
2.3.3d
based on that tariff.
Suppliers are required to display tariffs inclusive and exclusive of VAT on a per
2.5.1
unit basis.
Where a supplier is displaying day/night tariffs on a full year basis, the number
2.5.7
of day and night units must be clear.
Suppliers must also separately display any additional levy or charge which
2.5.8
applies to the account; inclusive and exclusive of VAT.
Where a supplier is offering a dual fuel bundle, the gas and electricity tariffs
2.5.9 should be shown separately with details provided on the additional components
of the tariff.
Table 2 - List of Assessed Requirements
11An Coimisiún um Rialáil Fóntais Commission for Regulation of Utilities
Annex 2
Full details of all non-compliances found with the Household Code of Practice on Marketing and Advertising
Section in
Code of Requirement
Practice
Suppliers must adopt a fair and transparent approach to the marketing and advertising of products and services. Suppliers must ensure that the information
2.2.4(a) provided to customers either in writing or verbally through marketing and advertising is:
a. easy to understand complete, accurate, transparent and not misleading in terms of information that is provided or omitted
Supplier Finding
Community
Power Unit rates inaccurate as shown as being in c/kWh but decimal point two places too far to the left, making the numbers inaccurate by a
factor of 100.
Waterpower
Community 76/24 breakdown used to calculate EAB for D/N tariff. CRU recommends 50/50 breakdown at present across all suppliers to achieve
Power standardisation for ease of customer comparisons.
Electric Ireland No extra charge outlined for Night Storage Heating made it unclear how some EABs were calculated.
Electric Ireland The footnotes related to the Electricity NightSaver tariff are mixed up.
EAB for Glowfest Saver and Glowpower Standard tariffs is incorrect, with EAB being overcalculated (making the EAB appear more
Glowpower
expensive than actual calculated value).
EAB for 28% Electricity and Dual Fuel price plans undercalculated the EAB by €50 (making the EAB appear cheaper than the
Panda Power
actual calculated value).
EAB undercalculated by €5 in most cases and by €42 in one case (making the EAB appear cheaper than the actual calculated
Pinergy
value).
Day/Night EAB figures are calculated based on an estimated use of 3kWh per night (out of an estimated 11.5kWh per day). CRU
Waterpower
recommends 50/50 breakdown at present.
12An Coimisiún um Rialáil Fóntais Commission for Regulation of Utilities
Section in
Code of Requirement
Practice
Suppliers are required to display the Estimated Annual Bill on all marketing and advertising material as follows:
2.3.3.e(I) The Estimated Annual Bill should be displayed in the main body of the advertising or marketing material, in a prominent position, and is not to be displayed
only in footnotes;
Supplier Fining
Ecopower The EAB is not in a prominent position. The estimated monthly bill is advertised clearly, but this is not the metric advised by the CRU.
Section in
Code of Requirement
Practice
2.5.4 Show the Estimated Annual Bill associated with each tariff, where appropriate, as detailed in Section 2.3.2 (See Appendix A for examples).
Supplier Finding
Ecopower The EAB is not provided for the standard electricity plan or for customers with a day/night meter.
Glowpower
The EAB is not provided for rural customers or those with day/night meters.
Panda Power
13An Coimisiún um Rialáil Fóntais Commission for Regulation of Utilities
Section in
Code of Requirement
Practice
Discounts must be set out clearly in cent per KWh. Discounts offered off the standard unit rate must be calculated and displayed incrementally or shown
2.5.5
as a cumulative discount (See Appendix A for examples).
Supplier Finding
Glowpower Unit rates shown in Euro per kWh.
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