According to Snoep, recent developments make it clear that consumer interests now mainly revolve around reliable and more secure energy contracts. He therefore, like Minister Rob Jetten (Energy, D66), wants energy companies to be obliged to offer a standard permanent contract for a longer period at a fixed time each year. ‘Comparable to the basic contract for health insurance. That, for example, closes on 1 January every year.’
Over the past year and a half, it has become clear within ACM that laws and regulations for energy trading are outdated. It dates back to a period when cheap domestic gas seemed a certainty and the Netherlands could therefore count on stable and low energy prices. The energy transition was also a long way off, so the idea that consumers, in addition to consumers of energy, are also suppliers of solar power, was not taken into account, for example. Snoep: ‘As a result, other things are now important to energy consumers than they were then.’
When energy legislation was drafted in the early 2000s, the goal was for new entrants to ‘start up the market’ by competing with former public companies. It became relatively easy to start an energy company and consumers were encouraged to switch. Almost twenty years later, the Netherlands has more than sixty energy companies, including dozens of very small ones.
Snoep: ‘Consumers benefited for a while due to lower prices, but last year we saw prices rise and a number of companies turned out not to be well prepared for this. Then circumstances became very bleak.’ Seven energy companies collapsed, as a result of which vulnerable customers suddenly had to buy energy from a new provider at much higher rates.
Energy contracts
ACM is often criticized for inadequate supervision of energy companies. Last year because of the bankruptcies and more recently in the discussions about the price cap that will take effect on January 1. There is great fear in the House of Representatives that energy companies will make gross excess profits. Politicians hoped that ACM would be able to determine and preferably also check whether companies earn more than a reasonable margin. But there the regulator had to disappoint the politicians. That was impossible for sixty companies with a total of 27 thousand rate changes per year.
This also avenges the fact that it was decided twenty years ago that the energy companies would fall under a ‘light supervisory regime’, explains Snoep. ‘The assumption was that competition between energy companies had an incentive to offer good and competitively priced contracts.’
But given the current energy market, it is more logical to impose a much stricter supervisory regime on energy companies, says Snoep. For this, ACM needs much more staff than the 100 people who currently monitor the energy market, the regulator warns. It will also mean a significant additional administrative burden for energy companies. ‘You can then expect that many small companies will not be able to do that and that you will be left with a number of larger providers. You also see that in the banking sector.’
supervision
In the meantime, ACM says it is working with all its might to monitor the energy companies as closely as possible next year ‘within the current lines of the law’. ‘We will look closely at the standard rates that energy companies advertise on their websites. We also check the books of companies if we suspect that rates are not reasonable.’