RAE set to officially announce new cost-clause rules for suppliers

RAE, the Regulatory Authority for Energy, has prepared a list of cost-clause guidelines for electricity suppliers, the objective being to offer consumers greater transparency and improve price-comparing ability.

Electricity suppliers typically include cost-related clauses in electricity bill agreements as cover for various unanticipated cost shifts. However, some of these clauses, usually included in fine print, have tended to confuse or astonish consumers, prompting complaints.

RAE is expected to officially announce its new set of cost-clause guidelines, ten in total, by next Tuesday, energypress sources have informed.

The guidelines have also been forwarded to the energy ministry, which may choose to apply them for an amendment of electricity supply rules. This would make the guidelines legally binding.

Suppliers will have two months to adjust to the new guidelines, otherwise they could face penalties.

According to the RAE guidelines, electricity suppliers must include a fixed-tariff option for household and small business consumers as an alternative to an adjustable rate.

In addition, suppliers will need to set a realistic range of clause-triggering cost levels so that clause usage is limited to unusual, damage-inflicting market conditions for suppliers.

Any clauses included in supply contacts must be clearly presented along with all other terms, not in fine print. Also, clause-related charges and calculations must be clearly shown in every electricity bill.

Furthermore, electricity supplier websites must include clause examples.

Another new term states that penalty clauses for premature consumer withdrawals from supplier contracts should be limited to fixed-tariff agreements. Such a clause should not be included in supply agreements for consumers who have chosen floating tariff rates as these consumers have taken on the risk of any cost changes, according to the new RAE guidelines.