European Energy Consumers’ Charter: Q&A on the opening of the EU energy markets

Four days after the full opening of the EU energy markets on 1 July 2007, the European Commission launched a process that will eventually lead to the adoption of an Energy Consumers Charter. Consumers’ rights in the energy sector will thus be compiled in a single document at EU level for the first time. The Charter will aim to inform EU citizens about their rights relating to electricity and gas.

The internal energy market legislation of 2003 set 1 July 2007 as the deadline for market opening for all customers. 13 Member States have already opened their electricity and/or gas markets before that date. Others open their energy markets on 1 July and for specific reasons and after a derogation granted by the Commission some Member States will open the markets in the years to come. The table below presents an overview of the situation in the European energy markets.

An “open energy market” brings down any legal or administrative barriers for companies to enter the market and to supply electricity and gas to the public. This means that after 1 July 2007 several competing suppliers should have the opportunity to enter the market and make offers to consumers. It will be up to the consumers to choose the offer that is most advantageous to them. However, since individual consumers, who represent 27% of the total EU electricity consumption market, do not have much influence on the energy market, the electricity and gas directives require public authorities to safeguard their rights, in particular the right to receive electricity at reasonable, easily and clearly comparable and transparent prices and to create the conditions for consumers to have confidence in the market and choose the most advantageous offer. An open energy market also involves safeguarding business interests, vital for the proper functioning of the EU’s internal market and the provision of impetus to competition, innovation and economic development.

As of the same date, local electricity and gas distribution companies will also have to be organised as legally separate companies (so-called ‘legal unbundling’). This measure will enhance the independence of the distribution companies from their parent companies with the aim of ensuring a fair access of all suppliers to the distribution network. At transmission level legal unbundling became compulsory already in 2003.

Open energy markets help to achieve a truly competitive single European electricity and gas market where prices should result from genuine competition among suppliers and where consumers’ right to choose their supplier – including through switching – are safeguarded. An open energy market also improves security of supply and helps protect the environment, as companies are driven to innovate in the field of environmentally-friendly renewable energies.

The electricity and gas services are identified as “services of general interest” to which European citizens should have access. Every European citizen has the right to receive against payment regular and safe and secure electricity and gas services. Each Member State takes the appropriate measures to ensure that all consumers have access to these services, especially the vulnerable ones, at reasonable, easily comparable and transparent prices.

EC law requires Member States to identify vulnerable citizens. Economicmobility and other criteria are to be established in each Member State. Because of their specific characteristics such as reduced mobility, low income, or residence in rural areas, vulnerable citizens are considered more susceptible to suffer in an open competitive energy market and to become victims of misleading and aggressive commercial practices. Vulnerable citizens can be protected through specially established social schemes like social aids and reduced tariffs ensuring their continuous access to the electricity and gas services and sufficient warmth for their health and comfort.

It is in the interest of every European consumer to actively look for the most appropriate and advantageous offer in the market. You have the right to switch electricity or gas supplier without costs. By exercising your right to choose among suppliers you may contribute to boosting competitiveness and to developing new and renewable energies to fully benefit from the opening of the market, make yourself familiar with your rights as an energy consumer. The European Commission will help you do this through an EU-wide awareness and information campaign.

The EU has laid down rules and regulations on the opening of the energy markets in your country, which along with your national legislation are there to ensure that you are properly informed before signing a contract, including on your right to withdraw if you do not accept new conditions to this contract after having signed it. You are also protected against misleading and aggressive selling practices. More specifically, from 12 December 2007 onwards, when the unfair commercial practices directive will be applicable in all the Member States, non-contractual barriers to switch – i.e. excessive paperwork and disproportionate waiting times for switching – could be prohibited under this instrument.

The European Commission will help strengthening these consumer rights by proposing elements for a European Energy Consumers’ Charter, which shall seek to effectively implement consumers’ rights and possibly improve them. The objective is to have the charter adopted and endorsed by regulatory authorities, the energy industry, consumer organizations and other stakeholders. The European Commission will set out guidelines to help effectively implement energy consumers’ rights. It will also monitor the situation of consumers on the energy markets and intervene where appropriate.

For your information on the protection of your rights as consumer, the European Commission put forward elements for a future European Energy Consumers’ Charter. The latter will clarify your rights as an energy consumer and sum them up in a single document. A consultation process on the elements for such a Charter has been launched on 5 July 2007 inviting energy partners Europe-wide to share their views on the contents of a future Charter.

The objective is to have an agreed and final document signed and endorsed by stakeholders.

European legislation requires that any contract an electricity or gas supplier submits to your signature should contain the following information:

• the identity and address of the supplier;
• the services provided, the service quality levels offered, as well as the time for establishing the initial connection;
• the tariffs requested and conditions attached to it like parameters for calculating the tariffs and possible indexation mechanism;
• available payment parameters and facilities;
• the types of maintenance service offered;
• the means by which up-to-date information on all applicable tariffs and maintenance charges may be obtained;
• the duration of the contract, the conditions for renewal and termination of services and of the contract, the conditions of your right of withdrawal;
• any compensation and the refund arrangements which apply if contracted service quality levels are not met; and the method of initiating procedures for settlement of disputes.

As European citizen and as consumer you have the right to the protection of your rights. Competent national bodies in your country – in most cases the regulatory authorities – are responsible for representing your interests in your country of residence. You can also contact consumer organizations in each Member State and the European Consumer Centres in order to receive information on your energy rights as consumer and to file complaints in cases that your rights are infringed.

For more information on energy consumers’ rights and the opening of the energy markets visit the Commission’s campaign website

The website of the European Commission’s Directorate-General for Energy and Transport dealing with the European Charter on the Rights of Energy Consumers