Consumers, who represent 27 % of the total EU electricity consumption market, do not have much influence on the energy market as individuals. Public authorities must therefore create the conditions for consumers to exercise their choice, looking for the most advantageous offer, confident that their rights will be safeguarded, especially if they decide to switch. Consumers need, for example, sufficient information on which to base decisions about choosing suppliers. They also need clear terms and conditions in contracts and need to feel confident that changing supplier – if they wish to do so – will be free of charge. Effective instruments against misleading and aggressive commercial practices, to pressurise consumers to switch or to make it difficult for them to switch, must be put in place. Finally, dispute settlement mechanisms must be easily accessible to consumers.
The Energy Consumers’ Charter aims to inform citizens about their rights and to reassure them that these rights will be safeguarded.
Policy background
Opening up EU energy markets, promoting competition and contributing to the EU’s growth and jobs agenda were the aims behind two EU Directives (2003/54/EC and 2003/55/CE) adopted in 2003. The date of 1 July 2007 was laid down as the deadline for opening energy markets for all consumers and households.
Meanwhile, the European Commission’s wide-ranging “energy package” of 10 January 2007, including a Communication on “An Energy Policy for Europe”, outlined the key criteria on which the internal energy market should be founded:
* Sustainability
* Security of supply
* Competitiveness
Achieving sustainability and security of supply will mean developing new energy resources and enhancing energy efficiency. Consumers can contribute to these wider aims by exercising their right to choose their own supplier t, thereby enhancing competition and driving innovation.
Towards a European Charter on the Rights of Energy Consumers
From 1 July, all electricity and gas consumers - in the EU Member States that have opened their markets - can choose their energy supplier. The future Charter will contribute to raise awareness among citizens and along with the Commission's information campaign ensures that EU citizens are fully informed of their rights as energy consumers.
The future Energy Consumers Charter will also facilitate consumers’ access to electricity and gas services based on the following key goals:
* Better protection of vulnerable citizens;
* Increased information to obtain transparency of offers;
* Reduced paper work when customers change supplier;
* Protecting consumers against unfair selling practices.
Along with the entitlement to choose a supplier and the universal right to receive energy, the future Charter should provide a range of accompanying standards for the protection of consumers’ rights, including in the areas outlined as follows:
Increased information to obtain transparency of offers
This involves the information that should be communicated to the consumer before they confirm or conclude a contract with an energy supplier, in the interests of transparency and quality of service, such as: the name, the service, the quality of the service provided, the tariffs, the right of withdrawal and details concerning the duration and renewal of the contract.
Reduced paper work when customers change supplier
Procedures for switching supplier must be efficient and without cost. When consumers are free to choose their supplier they must also be free to change supplier without fear of unduly long or overly bureaucratic switching procedures.
Protecting consumers against unfair selling practices
In a market opened to greater competition, there is always a risk that some competitors will attempt to gain the upper hand by providing misleading information or engaging in unfair selling practices so as to pressurise consumers to switch supplier or make it complicated to switch. Unfair commercial practices are prohibited under the EU Unfair Commercial Practices Directive that will be applicable as of12 December 2007.
More efficient protection of vulnerable consumers
Another issue of concern is that of “fuel poverty” - some consumers’ potential vulnerability to excessive price fluctuations, possibly leading to a risk of disconnection from their energy supply. A large majority of EU citizens have a sufficient supply of energy, but fuel poverty (electricity and gas) is nevertheless considered to be a growing risk in view of increasing energy prices and the constantly growing demand and consumption of energy resources.
The Charter aims to inform vulnerable citizens of their right to uninterrupted access to electricity and gas supply. It calls for schemes to protect them from increases in energy prices that could threaten them with disconnection. So far, the situation differs throughout the European Union, with only five out of the 27 Member States having put in place special conditions for the protection of vulnerable citizens. The Charter will help to address such gaps.
Next steps
Stakeholders (including consumer representatives, energy regulators, EU Member States and the gas and electricity industry) will be consulted on the proposed elements for a Charter. The Commission will then draft the final document based on their input, which interested parties will sign during a formal ceremony.
This should take place in the beginning of December 2007.
