May 13, 2008
Amid concerns over rising energy prices, the Commission is preparing a new online information pool on the rights of energy consumers, while MEPs in the Parliament’s Industry Committee have voted for stronger consumer protection measures in the EU’s energy market liberalisation drive. Industries and private households are in theory able to freely choose their energy supplier following the entry into force of EU directives in 2004 and 2007, but energy consumers continue to complain about high prices and a lack of supplier choice. Partially in response to these concerns, the Commission on 5 July 2007 launched a new initiative for a European Charter on the Rights of Energy Consumers.The charter, which is non-binding but compiles existing EU energy consumer rights in a single text, was criticised by the European Consumers’ Organisation (BEUC) for lacking teeth, while the German Centre for European Policy (CEP) argued that the charter would undermine freedom of contract and disturb market development.Consumer issues are also addressed in the Commission’s ‘third package’ of proposals to liberalise the energy sector.The rights of energy consumers are outlined in the EU’s 2003 directives on electricity and gas liberalisation, but Europeans have a “limited” awareness of their rights, according to the Commission, which on 6 May set in motion the creation of a European Energy Consumer Checklist.The checklist will compile information in an online database about local and regional energy markets. The information will be presented in the form of responses by member state authorities to a collection of ‘frequently asked questions’ about various aspects of retail energy markets. The list of questions, which are being prepared by the Commission, has not been finalised.A new Citizens’ Energy Forum is also being established by the Commission as a platform for debating consumer protection issues between “stakeholders active on all aspects of retail markets,” EU Energy Commissioner Andris Piebalgs announced in
Brussels on 6 May. The forum will include “energy regulators, competition authorities, national bodies competent for enforcing energy consumer rights, member states’ energy and consumer administrations and industry and consumer associations, from both European and national levels,” he said. While the checklist and the forum constitute non-binding measures, MEPs in the Parliament’s Industry Committee on 6 May voted in favour of a series of consumer-related measures to be added to the Commission’s third energy package.In addition to guarantees relating to access of information, MEPs want to give consumers a legal right to withdraw, without penalty, from contracts with electricity providers and to obtain compensation for poor service quality.MEPs are also calling for the provision of ‘smart meters’ to consumers within 10 years of the entry into force of the third package. Such meters provide more detailed information on energy consumption, both to consumers and utilities.Amendments to protect the poorest citizens were also endorsed by MEPs, who want member states to “implement appropriate measures to achieve the objectives of social and economic cohesion which shall lower the cost of energy to low income households and guarantee the same conditions for those living in remote areas,” the amendment said.While MEPs did not vote in favour of a system of state-regulated energy tariffs, which are popular in
France, the committee did vote in favour of allowing national authorities to set temporary (one month or less) price caps in the event of sudden hikes in energy prices.
These latest moves by the EU on behalf of energy consumers are “just a beginning”, according to Muriel Danis of the European Consumers’ Organisation (BEUC). BEUC, which is in favour of full energy market liberalisation through ownership unbundling is pleased that the Commission’s third package includes calls for the creation of a European regulator to oversee market abuses. But the organisation laments that national regulators do not possess sufficient powers to take direct legal action against firms that engage in abusive market behaviour.
Levi Nietvelt, BEUC’s economic officer, says consumers are “concerned and afraid” about further price hikes for energy. But Nietvelt also points out that while consumers in some member states are in favour of greater energy supplier choice as a result of liberalisation, consumers in countries like France are concerned about an end to regulated tariffs that can keep energy prices below market levels.
From EurActivAuthor : EMI