The Commission has suggested introducing a European Charter on the Rights of Energy Consumers. However, the German Centre for European Policy (CEP) states in a July 2007 paper that such a charter would undermine freedom of contract and disturb market development.
The recent Commission communication on the rights of energy consumers could infringe national and Community law and damage the economy in Europe, adds the paper.
The communication – presented on 9 July 2007 – relates to a former communication which had been put forward in January 2007. At that time, the Commission had explained that it would strive for comprehensive protection of the interests of energy consumers.
The recent communication ”Towards a European Charter on the Rights of Energy Consumers” summarises the existing rights of consumers in the energy sector before identifying four key goals on which the future Charter should be based:
- providing more efficient protection of vulnerable citizens by offering a free minimum level of energy services (power, heating and lighting) in order to prevent energy poverty;
- providing more information for consumers regarding options of supply;
- reducing paperwork when changing supplier;
- protecting consumers from unfair sales practices.
The proposal – which in CEP’s eyes contains characteristics of a “planned economy” – is criticised for three main reasons:
First, CEP points out that the European Union has no competence in the field concerned because energy supply issues lack ”a relevant transnational aspect” as features vary among member states.
Furthermore, social policy would be involved if energy services were offered to socially-disadvantaged consumers at lower prices or even free of charge, but as of yet there is no Community competence for social policy.
Second, CEP highlights that ”the proposed means are mistaken”: Providers would have to bear the cost of a more favourable or free power supply for vulnerable citizens. This would infringe national law if no appropriate compensation was paid by the state. Furthermore, this approach would intervene in the price system and, thus in freedom of contract and freedom of occupation.
Third, CEP states that free energy for vulnerable consumers necessarily leads to higher prices for other consumers. Therefore, it expects that growth and occupation particularly in energy-intensive industries might be damaged.
The CEP paper concludes by claiming that the Commission should limit its activity to summarising existing consumer rights within the energy sector and abandon suggestions for additional consumer rights, especially on the supply of free energy for socially-disadvantaged citizens.