Two-thirds EU nations still regulate retail energy prices: EC
Brussels (Platts)--15Nov2012/831 am EST/1331 GMT
Two-thirds of EU countries still regulate retail electricity and/or gas
prices, hampering investment and distorting price signals for consumers, the
European Commission said Thursday.
"We need to get to grips with regulated prices," EU energy commissioner
Gunther Oettinger told reporters in Brussels as he presented the EC's review
of the EU internal energy market.
"Eighteen member states still regulate their end-user prices,
particularly electricity," Oettinger said. The state introduces rules and
sets prices itself. This is not our understanding of what a single European
market should be about."
The EC wanted to see regulated prices being phased out over the next few
years, particularly those which are below market prices, Oettinger said.
"Looking at overall costs is the fairest way [to form prices]," he said.
"We reject subsidies beyond this."
Oettinger added that price regulation is permitted under certain
conditions, one of which is that it must not distort competition.
EC sources said national governments should protect vulnerable and
disadvantaged customers, but stressed that such customers might need help
understanding how to get a good deal more than financial support.
"Prices set by state intervention do not provide consumers with the best
deal," the EC said in a statement Thursday.
Such regulated prices "risk giving a false impression of protection that
de-incentivizes" consumers from actively exploring better options, including
energy efficiency services, the EC added.
Only nine of the 27 EU countries do not have regulated retail energy
prices: Austria, Czech Republic, Germany, Finland, Luxembourg, the
Netherlands, Slovenia, Sweden and the UK.
Belgium, Greece, Ireland, Latvia, Lithuania and Spain have regulated
prices for household customers, EC data shows. Bulgaria, Cyprus, Czech
Republic, Denmark, Estonia, France, Hungary, Malta, Poland, Portugal, Romania
and Slovakia have regulated prices for both household and industrial
Greece, Lithuania and Portugal have committed to phasing out regulated
prices by 2013, and Romania by 2017.
The EC said that regulated end-user prices "impede investments" and
deter new entrants.
"Prices regulated below costs lead to debts which ultimately fall back
to taxpayers," it said. "The Commission will work with member states to
empower consumers and to reduce state interventions which distort markets,"
The EC's review comes a month after EU leaders repeated their commitment
to complete the internal energy market by 2014.
But the review found that 12 EU countries have still not notified to the
EC full implementation of the EU's third package of internal energy market
reforms, 20 months after the deadline to do so.
--Siobhan Hall, firstname.lastname@example.org
--Edited by Richard Rubin, email@example.com
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