New rules aimed at improving electricity bills and reducing bill shock have been introduced by the Electricity Authority.

The Electricity Authority has announced changes designed to make billing clearer, limit large back bills and require power companies to check customers are on the best plan they offer.

Under the package, billing information must be clearer and more consistent, with charges explained in plain language.

The Authority said the changes would make it easier for households to compare plans, with improved prompts directing people to a new comparison and switching website where they can check for better deals.

Large back bills will be capped at 6 months to reduce the risk of sudden, unexpected charges for households.

Retailers will also be required to check each year that their residential customers are on the best plan they offer and help them move at no cost if they are not.

Electricity Authority Chief Executive Sarah Gillies said the reforms were about strengthening retail competition and giving consumers clearer information.

“We’re giving people better information about the power they use and pay for, so they have the confidence to shop around. We also want to reduce the stress of unexpected back bills for households and small businesses,” Gillies said.

She said standardisation was also a key part of the reforms.

“Today we’re also announcing new product information standards, requiring retailers to provide structured and consistent information about their power plans. This will improve the accuracy of comparison websites, and bring transparency, accountability and long term value for New Zealanders,” she said.

The Authority is preparing to launch a new comparison and switching website, which it said will be free from commercial interests and designed to keep pace with changes in the electricity market.

About 1,500 electricity consumers provided feedback during consultation, with more than 90 percent supporting the proposed changes.

General Manager Retail and Consumer Andrew Millar said the decisions supported wider work to improve market settings and strengthen competition.

“This is about demand side competition. When consumers can see, compare and switch more easily, retailers will have to compete harder on price and service. That delivers long term benefits for consumers across the market,” Millar said.

As part of the next phase, the Authority will consult on changes to the Electricity Information Exchange Protocol, known as EIEP14A, to ensure plan data is consistent and accessible for accurate comparison and switching tools.

The new rules will take effect on 30 October this year.