CEER Press Release: Is the Internal Energy Market working for Consumers? Regulators say: not yet!
London, 16 December 2013
• Switching electricity/gas supplier remains low despite savings potential • Regulators call for implementation of the 2020 Energy Customer Vision • Vision’s principles (Reliability, Affordability, Simplicity, Protection & Empowerment) are a touchstone for the Internal Energy Market.
The high-level panel discussion at the 6th Citizens’ Energy (London) Forum1, opened today by EU Consumer Policy Commissioner, Mr Mimica, and CEER’s Lord Mogg2, was on the topic “Is the Internal Energy Market (IEM) is working for consumers?”
Regulators’ message is clear - the IEM is not yet delivering full benefits to consumers and implementing the 2020 Energy Customer Vision3 can help make it happen.
Switching electricity/gas supplier remains low despite savings potential Regulators presented fact-based evidence, from the ACER-CEER Market Monitoring Report4 (of the Internal Energy Market), that show: - household gas prices in the EU rose by 10% and household electricity prices by 4.6%, leading to significant economic loss for consumers. - Incumbents are still dominant, with most markets showing little competition. Barriers to entry persist in many national retail markets, thus hampering retail competition and consumer choice. - Switching rates remain low despite significant savings potential.
Regulators call for implementation of the 2020 Energy Customer Vision CEER President, Lord Mogg, stressed that the focus now must be on implementing the 2020 Energy Customer Vision, which CEER developed with stakeholders in 2012:
“The widespread support that our Energy Customer Vision has gained (16 supporters along with the European Commission) testifies that the four so-called RASP principles upon which it is based (reliability, affordability, simplicity, protection & empowerment) are a touchstone for the Internal Energy Market.
Turning to the European Commission, he added: “The London Forum has an important role to play as a platform to monitor progress annually in delivering the 2020 Customer Vision and hence making sure that the Internal Energy Market delivers for consumers.”
Much of the 2013 London Forum discussion centres on customer empowerment with sessions on active consumers, demand response and how DSOs can add value for consumers in evolving market issues. CEER presented regulators’ work on a number of areas including on the role that consumer bodies play in the regulatory process (see CEER presentations and Lord Mogg’s speech). CEER continues to focus on customer issues which we see as a cornerstone of energy market policy: - CEER currently has two public consultations open on consumer issues (one on DSOs, and another on Green Electricity); - We have launched two customer reports (one on customers’ access to information on the costs and sources of energy and energy efficiency schemes; and the other on consumer bodies involvement in the regulatory process) - “Bringing the Internal Energy Market home to consumers” is the theme of CEER’s 2014 Annual Conference (22 January 2014).
Notes for Editors:
1. The European Commission established the Citizens’ Energy Forum (London Forum) in October 2008. The 6th annual meeting takes place from 16-17 December 2013 in London. The participants of the London Forum are national energy regulators, CEER and ACER, the European Commission, Ministries, consumer bodies, Ombudsmen and the energy industry. The London Forum is akin to the EU regulatory forum for electricity (Florence Forum) or for gas (Madrid Forum) but has a focus on consumer and retail energy market issues.
2. The Council of European Energy Regulatory (CEER) is the voice of Europe’s national energy regulators. Its members and observers, from 32 European countries, are the independent statutory bodies responsible for energy regulation at national level. CEER has long been a champion of consumer empowerment. Visit www.ceer.eu
3. CEER took an initiative in 2012 to build (with stakeholders) a 2020 vision that puts energy customers first. BEUC, the European Consumer Body, also backed our initiative from the start. The result was the CEER-BEUC 2020 Vision for Energy Customers presented to the November 2012 London Forum. The CEER-BEUC 2020 Vision appears as an Annex to the London Forum Conclusions. In addition to the European Commission, 16 key energy stakeholders have declared their support for the Vision (ANEC, CECODHAS, CEDEC, Cooperatives Europe, EDSO for Smart Grids, ENTSO-E, ENTSOG, ESMIG, EURELECTRIC, EuroCoop, Eurogas, GEODE, IGU, NEON, SEDC, UEAPME)
4. CEER extensively monitors customer rights in Member States. At today’s London Forum, CEER presented the findings of the ACER-CEER Market Monitoring Report on customer protection and empowerment, and retail market monitoring. The Annual Report on the Results of Monitoring the Internal Electricity and Natural Gas Markets presented on 28 November 2013 fulfils the Agency’s mandate established by Article 11 of Regulation (EC) No 713/2009. It covers retail prices for electricity and natural gas, access to networks (including network access by electricity produced from renewable energy sources), and compliance with the consumer rights laid down in Directive 2009/72/EC and Directive 2009/73/EC. By producing a joint report, ACER and CEER aim to provide as complete an assessment as possible of progress towards the implementation of the Third Energy Legislative Package, focusing on the remaining barriers for the completion of well-functioning electricity and gas markets in 2014.
Main findings in the Report on consumer protection and empowerment: - Definitions and conditions for universal service applied vary widely. - Most countries have designated suppliers of last resort (24 electricity, 21 gas) - There has been progress in shortening the time it takes for consumers to switch suppliers. The three week period for switching applies in electricity for most (23) Member States, less so for gas (18) - Most countries have independent dispute settlement mechanisms in place (20 in gas and 25 in electricity) - Most countries have a single point of contact (23 electricity, 22 gas) - Measures to protect vulnerable customers also varies widely across European countries
Main findings in the Report on retail market monitoring: - There is almost unchanged electricity demand and a decrease in gas demand. Despite the continuing economic downturn in 2012, household gas prices in the EU rose by 10% and household electricity prices by 4.6%, leading to significant economic loss for consumers. - Incumbents are still dominant, with most markets showing little competition. Barriers to entry persist in many national retail markets, thus hampering retail competition and consumer choice. - Regulated retail prices (which can disengage consumers from switching and, if set below costs, can act as a barrier to entry) are still prominent (49% of household electricity customers and 46% in gas were still being supplied under regulated prices).
For more information on CEER, our customer fact-sheets and our dedicated customer website visit www.ceer.eu.
Council of European Energy Regulators (CEER) www.ceer.eu
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