EU tries to assuage consumer fears about energy prices

A Commission initiative to launch an Energy Consumers’ Charter has run into criticism from consumer groups who argue that its non-binding character will not be enough to stop borderline commercial practices.

On 1 July, EU energy markets were officially opened amid concerns that liberalisation may not be the best way to simultaneously ensure lower consumer prices, environmental sustainability and security of supply (EURACTIV 05/07/07).

The Commission admits that “market opening as such cannot guarantee a sufficient degree of supplier choice and competition” which is supposed to push prices down.

EU Energy Commissioner Andris Piebalgs is confident nonetheless that liberalisation will eventually pay off for consumers. “We know that markets bring the best prices and the best service,” he said in an interview with EURACTIV in January.

But the European Consumers’ Organisation (BEUC) has stated that, so far, the “current liberalisation is largely a missed opportunity for consumers”, and has cited a number of consumer complaints: “difficulties in switching suppliers, incorrect billing, difficulties in contacting operators with questions or complaints, overpriced ‘help-lines’ and aggressive door-to-door selling”.

BEUC has called for guarantees on consumers’ rights as part of the liberalisation drive, and the organisation welcomed the Energy Charter initiative, promising to “analyse the proposed Charter in the light of information reported by our national member organisations on the ground”.

According to the French consumer group UFC-Que Choisir, industrial consumers of electricity saw price increases of up to 60% after the initial round of liberalisation in 2004. The group warns that a repeat of the phenomenon is “highly probable” in the household sector, particularly in the event of a spike in imported gas prices.

The Commission suggests that the Charter, to be finalised in December after a stakeholder consultation, should include measures to guarantee consumers more information on energy providers and prices, more protection from unfair selling practices and less paperwork.

Sir John Mogg, who chairs the European Regulators Group for Electricity and Gas (ERGEG), said that market opening “must go hand in hand with integrating national markets and effective unbundling – all part of the current debate in Brussels”.

Eurelectric, the electricity industry association said: “While some aspects of customer protection require legislation, others are best dealt with via voluntary approaches by companies in dialogue with consumers. Consumer legislation often results in differing national processes, presenting an obstacle to a common European retail market model and hindering market integration. The priority should be to foster real choice through competitive markets that companies want to enter.”

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