Competition, consumers & Competition, consumers &

affordable prices in affordable prices in liberalisedliberalised energy markets energy markets

J. Minor, European Commission, Director, Consumer J. Minor, European Commission, Director, Consumer AffairsAffairs

IV World Forum on Energy Regulation, 20/10/2009IV World Forum on Energy Regulation, 20/10/2009

Why a Commission Service for Consumers?

Single Market ReviewReconnecting with citizensEvidence-based & outcome-oriented policiesGeneral market monitoring exercise

EU Consumer Policy Strategy 2007-2013Better monitoring consumer markets and national consumer policies Consumer Markets ScoreboardTo empower EU consumers, with real choices, accurate information, market transparency, effective protection and solid rights;To enhance EU consumers‘ welfare, in terms of price, choice, quality, diversity, affordability and safety;To protect consumers effectively, by ensuring protection against risks and threats that cannot be left to individuals to deal with.

Consumer Markets Scoreboard

Screening consumer markets 5 Top level indicators: complaints, prices, satisfaction, switching and safety

Identify malfunctioning markets for further in-depth analysis

Integration of retail internal marketFragmentation, Cross border issuesCross border sales, information, complaints, disputes, enforcement, consumers and retailers attitudes towards cross border purchases

Benchmarking the national environment Performance of national policies / instruments

Enforcement & empowerment

2nd Consumer Markets ScoreboardMarkets that are not functioning well:

energy, banking, transport (rail and bus)Findings based on satisfaction and switching surveys comprehensive questionnaire, in-depth findings

Follow-up study on retail electricityTools to be used:

Surveys, Mystery shopping, Stakeholder consultation

Questions: Can consumers benefit from a well-functioning market in terms of price, choice and quality?

Are consumers able to make informed, rational and empowered choices?

Issues: Information and awareness, switching and comparability of offers, unfair commercial practices, billing, contract terms, dispute resolution

Results will be published in Autumn 2010

Consumer empowerment in competitive energy markets: making markets accessible

Competition: unknown territory for most individual consumersConsumer participation empowerment

Information: correct, concise, comparableCase in point: energy bills

Citizens’ Energy Forum mandate: Commission led a Working Group on Billing

Participation: ERGEG, consumers (ECCG sub-group on Energy), industry Focus: regular paper bills, annual reconciliation statement Deliverable: Recommendations, good practices

Commission created model bills

Competitive energy markets & affordability 1

1/3 EU consumers find electricity, gas and water too expensive (Eurostat)

In some EU countries 1/3 consumers faced difficulties to keep houses warm (2006)

Low income consumers have a budgetary need to 'pay as they go' – this has created higher bills in the past (UK)

UK defined fuel poverty & published data: in 2008 more than 20% households fuel poor (>10% of income on energy), UK target: no fuel poor by 2016-18

Similar stories for “newer’’ EU Member States

EU law: "reasonable prices" for electricity & gas.

Third Energy Package: Member States must define reasonable prices & who benefits from special treatment (social tariff or other) Commission to make sure that definition will not impact on competition

Commission to facilitate dialogue, exchange of good practice, make sure that competition will not negatively affect consumer welfare

Further input in the framework of Citizens’ Energy Forum

Competitive energy markets & affordability 2

Information on

Energy and Consumer Bills: http://ec.europa.eu/consumers/citizen/my_rights/energy_en.htm

Report by the Working Group on Billing:http://ec.europa.eu/energy/gas_electricity/forum_citizen_energy_en.htm

(click on 2nd Citizens’ Energy Forum, Reports)

Monitoring markets and the Consumer Markets Scoreboard http://ec.europa.eu/consumers/strategy/facts_en.htm

Thank you for your attention!