RAE pushing ahead with fixed tariff option plan, consumers irate

RAE, the Regulatory Authority for Energy, is preparing to deliver, for public consultation, a plan whose implementation will require the country’s retail electricity suppliers to offer consumers fixed tariffs as an alternative to existing flexible tariffs adjusted by a clause permitting revisions during market cost shifts.

A growing number of consumers have filed complaints in recent times in reaction to higher-than-expected tariffs resulting from decisions by electricity suppliers to trigger price-adjusting clauses as a means of covering elevated wholesale electricity prices, including higher CO2 emisson right costs.

The tariff-revising clause has caused confusion among consumers, caught unaware as to when and under what conditions suppliers may trigger it. Consumers have also complained about the clause being hidden in fine print and for not being notified.

Until recently, independent suppliers had opted to absorb rising wholesale electricity costs for many months before finally triggering the clause at the risk of losing customers.

RAE’s plan proposes the inclusion of fixed tariffs as a customer choice for a one-year period, presumably at relatively higher prices.

Fixed electricity tariff option for consumers being prepared by RAE

RAE, the Regulatory Authority for Energy, is preparing to present, any day now, proposals whose implementation will require the country’s retail electricity suppliers to offer consumers the choice of fixed tariffs as an alternative to flexible tariffs linked to clauses permitting revisions in line with cost shifts.

The authority is making final touches to new electricity supply terms to be forwarded for a public consultation procedure that may begin next week.

RAE was prompted to reach a decision requiring all electricity suppliers to offer fixed tariffs as an electricity-bill option following numerous complaints by customers facing inflated power costs as a result of decisions by retail electricity suppliers to trigger clauses enabling tariff hikes as a means of covering elevated wholesale prices.

This clause, one of numerous agreement terms presented to customers, has caught most consumers by surprise.

According to the RAE plan, consumers will be offered a choice between fixed electricity tariffs,  presumably at relatively higher prices and for a specific period of time, and flexible tariffs, initially lower but carrying fluctuation risk.

Besides increased wholesale prices, suppliers have also faced elevated CO2 emission costs.