Regulated electricity prices ‘impeding clean energy package’

Regulating retail prices impedes the successful implementation of the Clean Energy for All Europeans Package, a unique opportunity that would empower European energy consumers, Eurelectric, Europex, WindEurope and EFET (European Federation of Energy Traders) have warned in a joint statement.

The package promises to empower consumers through a combination of measures, such as efficient price signals, certified comparison tools and easy switching, the four associations noted. Should retail prices continue to be regulated in some member states, the benefits brought by the Clean Energy Package would be severely weakened, they stressed.

Retail price regulation is also a serious obstacle to competition among electricity supply companies, the groups noted, as this reduces the incentive of companies to become more efficient and discourages the emergence of new market participants, they explained.

In addition to their negative impact on retail markets, regulated prices also distort the functioning of the wholesale markets, limiting and partly undermining the price formation process, ultimately leading to higher electricity costs for all consumers, the associations noted.

Regulated end-user prices aim to protect household – even non-household – consumers from energy costs increases but the pricing methodology often lacks transparency and can prove counterproductive, the associations stressed.

Also, the phasing-out of regulated prices does not imply the end of fixed-price contracts, the associations specified, adding that electricity suppliers will continue to offer such contracts.

EFET files complaint against Greek, Bulgarian operators

The European Federation of Energy Traders (EFET) has filed a complaint to the European Network of Transmission System Operators (ENTSO-E) against the Greek and Bulgarian power grid operators, noting that the two are restricting trans-boundary trade between the two countries.

EFET described the conduct of IPTO, Greece’s power grid operator, and ESO, its Bulgarian counterpart, as abuse of their dominant positions in natural monopolies.

The complaint filed by EFET was prompted by IPTO’s decision to ban electricity exports on January 11 and 12 and ETO’s ensuing electricity export ban, which began on January 13.

EFET noted that the trans-boundary trade restrictions imposed led to the violation of guaranteed rights concerning interconnection access.

In its complaint, the federation also pointed out that the export ban negatively impacted market players who do not have access to alternative electricity sources, prompting significant financial damages for certain producers.

This EFET complaint is the first to be filed as a result of the developments prompted by the energy crisis in early January. As a result, both IPTO and ETO are now both being closely watched by European authorities.