Energy supplier switching must be easy, fast and free


Lord Mogg,
Chair, ERGEG
Brussels, Belgium — (METERING.COM) — September 29, 2008 – Energy supplier switching must be easy, fast and free, and better information and more ease of switching empowers consumers, the European Regulators Group for Electricity and Gas (ERGEG) has found in a review of switching in five countries – in the electricity and gas markets in Austria, France and Romania and the electricity markets in Spain and Sweden.

All consumers in the European Union have had the right to choose their suppliers in the electricity and gas markets since July 1, 2007, and in the five countries improvements in the supplier switching process have recently been implemented or are underway.

In all these countries the switching process is legally binding, except in Spain where only key points of the process have been included in the legislation. A standardized supplier switching process also is applied in all the countries, although in Romania the process is not yet applied for household customers.

The customer should only need to be in direct contact with one party, preferably the new supplier, when initiating a switch. This is the case in most of the countries, but in Romania the customers might also have to contact the current supplier.

The amount of information needed to switch supplier varies in the countries. For example in Austria, name and address is sufficient, if the facility can be clearly identified with this information. In Spain, more data is needed to be able to switch supplier, including name, address, customer ID, metering point ID, contract code, contract type and characteristics, and owner of the control and metering device.

The duration of the switching process in the five countries varies between 15 days to two months in the electricity markets and between 15 and 75 days in the natural gas markets. Austria and France have the same duration for the switching process in both the electricity and gas markets. In Romania, however, the duration of the switching process is longer in the gas market than in the electricity market. Restrictions regarding the dates when a switch can take place are found in Austria and Sweden, where a switch can only be carried out on the 1st of each month. The other study countries have no restrictions regarding when the switch can take place.

Regulated prices are found in France, Spain and Romania. It is possible for the customer to return to the regulated market in the French and Spanish electricity markets and in the Romanian electricity and gas markets. In the Romanian electricity market, however, there is a restriction and the customer can only return to the regulated market twice. In the French gas market, customers in the free market cannot switch back to regulated tariffs.

Based on these observations, key messages from the review are that the consumer’s right to switch supplier should be legally binding and that the switching process should be easy and free, as well as short as possible. Customers should only need to contact one party, preferably the new supplier, and there should be easy access to the information needed to switch (e.g. available suppliers, different types of contracts and prices).

Nevertheless such improvements will on their own not ensure consumers’ active participation in the market. Consumers need to be aware of their rights and to be empowered to actively participate in the market.

“Regulators will be doing all they can to make switching processes easier so that consumers can vote with their feet, find the best deal and switch to that supplier,” said Lord Mogg, chair of ERGEG, commenting on the advisory group’s work on supplier switching.

At the new Citizen’s Energy Forum (CEF), which will take place in London at the end of October, the European Commission and regulators will examine all aspects of energy markets at the customer level.

ERGEG provides advice to the European Commission on internal energy market issues.