Suppliers resort to legal action against RAE over price clauses

Electricity suppliers may have adjusted price-related clauses included in their electricity bills following a request by RAE, the Regulatory Authority for Energy, seeking greater price-comparing clarity for consumers, but some of these suppliers, who consider the authority’s initiative to be an intrusion into corporate pricing policy matters, have chosen to take legal action against the authority.

RAE had asked for a standardized adjustment from electricity suppliers by June 14, but they responded with loose individual interpretations of the guidelines before many resorted to legal action.

When forwarding its clause-adjustment request to suppliers, RAE also asked the energy ministry to adopt its guidelines for official incorporation into the electricity market’s regulations.

According to sources, the energy ministry does not intend to adopt RAE’s recommendations and, instead, has asked the authority to reconsider its guidelines.

Electricity suppliers include clauses in their supply agreements with consumers that enable price revisions to cover cost increases.

Many consumers have complained about the price-related clauses, noting they are included in fine print and confusing.

 

 

Suppliers seen loosely interpreting RAE clause adjustment request

Electricity suppliers, set to disclose adjustments to price-related clauses included in electricity bills, are expected to offer loose interpretations rather than strictly comply with  related guidelines offered by RAE, the Regulatory Authority for Energy.

Suppliers, who were given a June 14 deadline to make clause adjustments as a means of simplifying electricity-bill cost analysis and offer comparisons for consumers, have been highly critical of the authority’s guidelines, describing them as an intrusion and restriction on pricing policy.

Some suppliers have even threatened to take legal action against RAE, but this is not possible as the authority’s initiative is a proposal not an order.

Even so, suppliers need to present revisions, based on their respective interpretations of the RAE guidelines that will somehow reflect the proposals. Otherwise, consumers who are aware of the authority’s guidelines could turn against suppliers and file official complaints.

Suppliers, through their interpretations, will, without a doubt, seek leeway that could enable their commercial departments to attract customers.

RAE has asked suppliers to adopt standardized price-related clauses.

Suppliers have reassured they will deliver adjustments in accordance with the RAE recommendations but do not believe the overall effort will improve the ability of consumers to compare competing offers.

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.

Suppliers given 2 months for cost-clause rule adjustments

Electricity suppliers have been given two months to fully comply with a list of new cost-clause rules just issued by RAE, the Regulatory Authority for Energy.

Suppliers include cost-related clauses in electricity bill agreements as cover for various cost shifts. However, some of these clauses have tended to confuse or  surprise consumers, prompting complaints.

“The authority’s objective is to protect consumers,” a highly-ranked RAE official informed, pointing out that the new regulations will help consumers make clear price comparisons of various supplier offers in straight-forward fashion.

RAE staged a public consultation procedure on the matter over many months before deciding on its new clause rules, ten in total.

Electricity suppliers must include a fixed-tariff option for household and small business consumers as an alternative to an adjustable rate. Also, cost adjustment clauses will be based on one standardized formula.

In addition, suppliers will need to set clause-triggering cost levels realistically 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, according to the RAE guidelines.

Furthermore, electricity supplier websites must include clause examples.

Another new rule 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, the new RAE rules note.

RAE cost-related clause rules for electricity supplier bills imminent

A RAE (Regulatory Authority for Energy) plan detailing cost-related clauses electricity suppliers will be permitted to include in their electricity bills is expected to be finalized within the next few days, possibly by the end of this week.

The energy authority is expected to deliver clause guidelines following months of public consultation on the matter.

Electricity suppliers will need to adjust to these new guidelines as part of an effort being made by authorities to improve the price-comparing ability of  supplier offers for electricity consumers.

Independent suppliers have warned the new RAE guidelines could once again stifle competition in the country’s retail electricity market by limiting pricing-policy leeway for suppliers and consumer choices.

 

Independent players want clauses for cost factors other than the SMP

Supplier cost clauses should not be limited to the System Marginal Price (SMP) as various other wholesale market factors influencing the overall cost should also be taken into account, independent electricity suppliers have agreed in a related public consultation procedure completed yesterday.

Previously, RAE, the Regulatory Authority for Energy, proposed the implementation of a standardized SMP as the only permissible clause, the objective being to simplify consumer price comparisons of supplier offers.

Though independent suppliers do not want their supply term clauses limited to the SMP, they acknowledge this factor remains relevant under the current system, ending mid-way through 2020 with the arrival of the target model.

Suppliers believe some time will be needed for observations concerning the SMP’s replacement, including day-ahead market prices.

Also, the target model’s new markets will bring about significant supply cost changes that cannot be calculated at present, suppliers noted in the public consultation procedure.

Though PPC has asked that its contribution to the public consultation procedure not be published, the utility’s opposition to the cancellation of a CO2-related clause it applies is already widely known.

PPC chief supports use of CO2 clause, simplification expected

Power utility PPC’s chief executive Giorgos Stassis has defended the company’s need to maintain a CO2 cost clause included in its electricity bills as protection against emission cost increases, at a meeting with RAE (Regulatory Authority for Energy) officials.

The authority is working on revisions aiming to simplify electricity-bill clauses for greater transparency to household and business consumers.

Numerous complaints have been made by customers feeling confused by the current terms. RAE wants to establish terms enabling clearer price comparisons of supplier terms.

PPC’s right to maintain its CO2 clause has been questioned. At the RAE meeting, held yesterday as part of ongoing public consultation, the power utility’s chief contended creditor banks insist on the measure’s maintenance, adding its cancellation would require further electricity tariff hikes.

RAE may decide to continue permitting CO2 clauses once the target model is introduced, according to sources. If so, the current format will be revised to  offer consumers clarity, the authority has already stressed. Decisions are expected in about two weeks.

Imminent RAE decision expected to offer consumers clause clarity

Price-adjustment clauses included in electricity bills by suppliers are expected to be limited to the System Marginal Price (SMP), or the wholesale price, in an upcoming related decision by RAE, the Regulatory Authority for Energy, anticipated by the end of January, possibly within the next few days.

The energy authority, reliable sources informed, is revising clause-related rules following the completion of public consultation on the matter.

A growing number of households and businesses have lodged complaints after seeing their electricity bill costs pushed higher by clauses included by suppliers as protection against narrowing profit margins.

RAE staged a public consultation procedure over many months for feedback from disgruntled consumers. Many complaints were focused on a lack of transparency regarding the activation of clauses by suppliers.

Consumers are hoping the new RAE rules will simplify price comparisons of offers made by electricity suppliers.

Authority wants to end virtually all power bill price clauses

RAE, the Regulatory Authority for Energy, has prepared a plan aiming to abolish all price-related clauses included in electricity bills except for one linked with fluctuations of the System Marginal Price (SMP), or the wholesale electricity price, sources have informed.

The overall objective of this plan, which could be forwarded for public consultation within the next few days, is to offer full transparency to consumers on procedures determining their electricity bill costs.

An existing clause enabling electricity suppliers to revise prices in accordance with CO2 emission cost levels would need to be abolished if the plan is implemented. Power utility PPC has already triggered this clause in reaction to rising CO2-related costs.

The existing SMP clause, currently triggered by all suppliers except for PPC, will be subject to strict rules, enabling consumers to know the cost of their bills with simplicity and precision by  factoring the SMP price into a formula for an immediate result, according to the RAE plan.

The complexity of the current billing system makes it difficult for consumers to make safe comparisons of supplier offers.