The European consumers’ organisation BEUC sees progress on energy consumer rights in the third energy liberalisation package. More, though, could have been achieved. Levi Nietvelt, BEUC’s energy consumer rights specialist, points out that much will now depend on how member states implement the new gas and electricity directives and how willing national regulatory authorities are to use their new powers.

Have MEPs really strengthened the rights of energy consumers?

MEPs have made progress in strengthening consumer rights. Consumers will be better informed on their rights, for example on compensation for inaccurate or delayed billing. National regulatory authorities (NRAs) can set quality levels for gas and electricity companies. If these national quality levels are not met, consumers will have a right to compensation. However, the type of compensation consumers will receive will vary from country to county: it can be automatic compensation or, in some countries, the customer may face a complicated application procedure. Much will depend on how member states now implement the legislation.

Are you happy with what has been achieved by MEPs?

The Parliament has done what it could. Throughout the directives, there are small but conclusive advances. Still, more could have been done. The directives, for instance, could have stated that vulnerable consumers should have access to “affordable” electricity or gas, not just to “fair” prices the text now reads. Who decides what fair prices are?

Do you see any other important points of progress in terms of consumer rights?

One important element is that consumers will have one central contact point for consumer questions and an independent mechanism like an ombudsman or consumer body for complaints handling. Member states, too, will have to ensure that dispute settlement between companies and consumers is swift. Another example of progress is switching. Consumers now have the right to switch supplier within three weeks maximum. Settlement of accounts should take place within six weeks.

Is switching supplier so important when there is little competition in many countries?

If there is a lack of alternative suppliers, consumer switching is indeed a paper right. Even where people do switch more, as in the UK, the price differences between companies are not so great. Hence the importance of ensuring alternative suppliers can easily enter the market.

Will it be easy for companies to get out of their obligations to consumers?

A lot depends on how regulatory authorities use their new powers. What makes the difference between these NRAs? Of course, the institutional set-up matters as does the personality and beliefs of the head of the regulatory authority. In the text of the new gas and electricity directives, the NRAs have the power to impose significant penalties. If NRAs use these new powers, they may be challenged in court. NRAs will then have to be willing to defend their decisions.

Will consumer rights not depend on national regulators, who may lag behind?

Regulators who lag behind will face more advanced peers. I do not want to name and shame regulators. It is better to mention the good examples. The Italians, for instance, are very powerful regulators. The Austrians, and even the French, have been very consumer-friendly. Surprisingly, the UK regulator Ofgem is less so, stressing greater competition rather than consumer rights. Regulators in Belgium, and many in the new member states, do not have enough powers or staff. But what we do see is that regulatory authorities are moving away from just looking at competition, markets and companies to also looking at consumers. This progress is confirmed in the new directives.

Are smart meters so important for consumers?

We were not in favour of having a mandatory roll-out of smart meters. It depends on national circumstances. The current debate on smart meters has not really looked at how they can help consumers save energy. The biggest cost is not the meter itself, but installation. Also, a smart meter may actually not be that smart. It is comparable with a computer: It depends on the software and on how you use it. Smart meters appear more beneficial for network owners as they will no longer have to come and read meters. That saves on personnel costs. Accurate billing will also be easier.

Will we see a fourth energy package, perhaps in 2015?

No. I think the next package will be earlier, possibly as early as 2013. When discussions on this current liberalisation package started, BEUC called clearly both for increasing competition through ownership unbundling and increasing the powers of regulatory authorities. Ownership unbundling, as we know, was not retained. The Council did not want to go forward this time. The question of ownership unbundling will come back again.