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EU shifts energy policy focus to consumers' bills

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Published 07 December 2010, updated 15 April 2013

European consumers should be able to switch to the cheapest energy supplier more easily, EU energy ministers said at a meeting last Friday (3 December).

Conclusions adopted by an Energy Council last week commit EU member states to put into practice provisions laid down in the Third Energy Package, agreed in 2009.

Under the package, consumers were meant to be able to obtain information on their energy consumption and rights, enforced by an energy ombudsman.

As part of their Energy Efficiency Action Plans, member states are also supposed to introduce new technologies like smart meters for use by consumers.

Last week's Council conclusions speak of "providing correct, transparent and user-friendly information so as to change the behaviour of consumers towards energy savings," which are made most effectively with lower energy consumption.

The idea is that by having access to consumption-monitoring devices and simpler bills, consumers will be more aware of their energy expenditure and can change supplier if they want to.

Switching supplier

The conclusions highlight the "urgent need" for consumers to compare prices and be able to switch energy suppliers easily, with "special attention" placed on consumers' bills.

A European Commission study found last month that EU consumers could save around €13 billion or €100 per household each year if they were to shop around for energy prices and switch to the cheapest tariff available to them. However, less than one in three consumers actually bother to do so.

Liberalisation of the electricity market will therefore not be as beneficial to consumers as it could be, the study concluded.

Consumers must be "properly trained and educated," according to the energy ministers, who underlined that "the energy bill is one of the most important means of information to the consumer".

Energy poverty

In September, the Commission agreed to come up with a definition of energy poverty in a bid to put consumers on the bloc's energy policy agenda.

Over 50 million Europeans are estimated to be unable to pay their energy bills and maintain comfortable living standards.

However, it will be up to member states to set out what can be defined as energy poverty, the ministers said, meaning citizens' rights could be better protected in some member states than others. The Commission will then analyse how member states came up with their definitions.

An EU energy ombudsman

Ways of settling consumer disputes related to energy currently vary amongst member states. Germany, for instance, does not even have an out-of-court dispute resolution mechanism.

To fill these gaps, ministers proposed to establish an EU-wide "independent mechanism" to handle disputes in order to secure "efficient and effective treatment" of out-of-court settlements.

The mechanism could adhere to the model for treating complaints used by the existing European Energy Ombudsman Group, which is made up of ten consumer rights groups and energy companies.

Positions: 

Monique Goyens, director-general of BEUC, the European Consumers' Organisation, called for the Energy Council meeting to be followed up by action.

"Adopting consumer-friendly conclusions is one thing – now words must lead to action. Every one of us wants to reduce our consumption and energy bills, but we often lack the knowledge and tools to do so," Goyens said in a statement.

"Getting rid of incorrect and incomprehensible bills would be a first step in the right direction," she said.

"Governments' homework is quite simple. Unless existing rules on transparency, supplier switching, consumer protection and complaint handling are properly implemented, consumer rights amount only to hot air," she warned.

Background: 

The European Commission argues that there is a need for simpler and more informative gas and electricity bills as the majority of consumers find it difficult to compare offers from different providers.

Only 8% of European electricity consumers have switched providers in the past two years, although less than three in five are satisfied with their service.

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