Brussels (Platts)--30Nov2012/637 am EST/1137 GMT

EU governments should respond cautiously to the European Commission's calls for them to phase out regulated retail electricity and gas prices, EU consumer association BEUC said Thursday.

"We are not arguing for regulated prices, but don't rush to eliminate them," BEUC legal officer Guillermo Beltra told the launch event for EU energy regulator bodies ACER and CEER's first joint annual electricity and gas market monitoring report in Brussels.

"There is not enough competition in the free market yet," Belta said.

The ACER/CEER report found that only nine of the 27 EU countries do not have any regulated prices for gas or electricity: Austria, Czech Republic, Finland, Germany, Luxembourg, the Netherlands, Slovenia, Sweden and the UK.

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Belgium, Bulgaria, Denmark, France, Greece, Hungary, Italy, Lithuania, Poland, Portugal, Romania, Slovakia and Spain have regulated prices for both gas and electricity household customers.

Estonia, Cyprus and Malta have regulated household prices for electricity only (Cyprus and Malta have no retail gas infrastructure).

Ireland and Latvia have regulated household prices for gas only.

The percentage of customers on regulated prices where they are available is generally very high -- more than 80% and often 100%, the report found.

The exceptions are Belgium, with 8% on regulated electricity prices and 11% on regulated gas prices, and Spain, with 74% on regulated electricity prices and 35% on regulated gas prices, the report showed.

ACER director Alberto Pototschnig told the event that "regulated prices should be removed as soon as sufficient competition is in place." He added that until then regulated prices should be set at levels which do not distort or hinder competition.

The EC called for governments to phase out regulated prices for non-vulnerable customers in its review of the EU's internal energy market published November 15, particularly those below wholesale prices.

"It's disturbing to see how many member states interfere in commodity prices," the EC's head of unit for wholesale electricity and gas markets, Inge Bernaerts, told the event Thursday.

"In most cases the EC thinks there are better ways to protect customers," she added.

Beltra urged policymakers to check if wholesale market costs are formed efficiently and transparently before deciding if regulated prices are above or below them.

--Siobhan Hall, siobhan_hall@platts.com
--Edited by Maurice Geller, maurice_geller@platts.com

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