Transposition of Consumer Rights ERGEG Monitoring Report Christina Veigl-Guthann, ERGEG Task Force Chair

2 First Citizens’ Energy Forum, London, 27 October 2008  Report on the transposition of consumer rights as defined in Annex A of the Electricity and Gas Directives of 2003  Requested by the European Commission  Report on consumer protection instruments in Member States  Related to the provisions for strengthening the role of customers in the Third Package  A set of three best practices in relation to the supplier switching process, price transparency and customer protection was published by ERGEG in July Two years later, it seems particularly relevant and highly valuable to try to review if Member States (MS) have put in place these different consumer protection instruments  Scope: household customers  Report focused on household customers only, as Annex A of the Directives applies at least to household customers – it is up to each MS to decide whether other customer groups should enjoy the same level of customer protection as set out in Annex A Monitoring Report on Transposition of Consumer Rights

3 First Citizens’ Energy Forum, London, 27 October 2008 Monitoring Report on Transposition of Consumer Rights Methodology:  Based on the results of two questionnaires, one for electricity, one for gas  Questionnaires contained 46 closed questions  Questionnaires administered to the NRAs of EU Member States + Norway and Iceland  27 countries answered (exceptions: Malta and Bulgaria)  Responses are displayed with a focus on some countries’ individual characteristics, where deemed appropriate

4 First Citizens’ Energy Forum, London, 27 October 2008 General Comments There are many different ways to implement the consumer-related obligations at national level, depending on the retail market design and the level of maturity of the retail market. The position of European electricity and gas customers is determined not only by European energy legislation but also by EU consumer legislation (e.g. on unfair contract terms and commercial practices), national contract law, national consumer protection law, etc. The varying national situations are also shaped by the interpretation of existing European legislation – which is itself sometimes not entirely clear. In many MS with open markets, end-user price regulation still exists

5 First Citizens’ Energy Forum, London, 27 October 2008 Contractual Relationships – great variety  One contract (often with the supplier) or two contracts, in some countries both situations coexist, in some countries there are no written contracts (especially with the DSO)

6 First Citizens’ Energy Forum, London, 27 October 2008 Bills  There is no correlation between having one or two contracts and receiving one or two bills  More than 50% of MS have one single bill, in the other countries both situations coexist, almost no country with a provision for having two bills  In 2/3 of MS without regulated prices, suppliers have the obligation to separate amounts for supply price and network charges on bill(s) Separate bills for network and supply

7 First Citizens’ Energy Forum, London, 27 October 2008 Transposition of Annex A Provisions (I) High level of transposition for suppliers:  customers have to be informed of the most relevant aspects of the supply contract prior to signing it – Annex A (a)

8 First Citizens’ Energy Forum, London, 27 October 2008 Transposition of Annex A Provisions (II) High level of transposition for suppliers:  Information on price changes and changes of general terms and conditions – Annex A (b)  Customers shall not be charged for switching – Annex A (e)  Universal service and information about these rights– Annex A (g)

9 First Citizens’ Energy Forum, London, 27 October 2008 Transposition of Annex A Provisions (III) Room for improvement  Transparency and comparability of offered prices and services – Annex A (c)  Dispute resolution mechanisms – Annex A (f)  Wide choice of payment methods – Annex A (d)

10 First Citizens’ Energy Forum, London, 27 October 2008 Information  Price calculators: In 16 MS for electricity, only in 8 MS for gas In 9 out of 16 MS, price calculators are provided by NRAs In 13 out of 16 MS, they are provided by private companies (often in addition to an “official” one)

11 First Citizens’ Energy Forum, London, 27 October 2008 Information  Consumption and cost: Requirements vary from once a month to every three years Majority of MS: requirement to inform customers on an annual basis  actual customers’ experience may differ Bills based on estimated consumption exist in almost all countries. However, we do not know how many customers are concerned and often NRAs do not have data on this

12 First Citizens’ Energy Forum, London, 27 October 2008 Legal Minimum Frequency to Inform about Consumption

13 First Citizens’ Energy Forum, London, 27 October 2008 Supplier Switching In 1/3 of MS, customers have to be in contact with more than one market actor There seems to be room for improvement to ensure customer confidence and convenience with switching suppliers

14 First Citizens’ Energy Forum, London, 27 October 2008 Support Systems  Alternative Dispute Resolution Board Exists in about 2/3 of MS 9 NRAs are responsible for this board

15 First Citizens’ Energy Forum, London, 27 October 2008 Vulnerable Customers 40% of MS have a definition of vulnerable customers within the electricity and gas framework  50% of them offer a support system within theelectricity market and 60% in gas  6 countries have a special regulated price for them Nearly all MS have a general support system for vulnerable customers, i.e. social services support system for vulnerables within energy system

16 First Citizens’ Energy Forum, London, 27 October 2008 Other Findings  Information is key for customers to make their choices  Relevant information is often provided on the internet  In some countries this may be not sufficient, information campaigns or other information tools may be required  Market participants (suppliers & DSOs) play a key role in informing customers actively (through billing, companies’ marketing activities)  The bill is very relevant in customer communication

17 First Citizens’ Energy Forum, London, 27 October 2008 Other Findings Customers may be treated in different ways within one country if they are supplied with or without regulated end-user prices -some legal provisions apply only for regulated but not for liberalised market - price calculators can be found more often in countries without price regulation

18 First Citizens’ Energy Forum, London, 27 October 2008 Next Steps ERGEG’s priority for 2009 is to examine areas where further work (and what kind of work) is needed to work on consumer empowerment (also in line with the focus of the Citizens’ Energy Forum)  Complaint handling has been identified as an issue for 2009 (methods of complaint collecting, classification & reporting, plus recommendations on complaint handling)  A status review on the definition of vulnerable customers in MS is also envisaged for 2009

19 First Citizens’ Energy Forum, London, 27 October 2008 Thank you for your attention. For more information on ERGEG’s work on customer issues visit: