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ACM to assess whether suppliers comply with additional requirements and if they are well prepared for the upcoming winter period

The Netherlands Authority for Consumers and Markets (ACM) will conduct an additional assessment to see whether energy suppliers have sufficiently hedged their energy for fulfilling their current contracts with consumers. ACM will also check whether suppliers have sufficient funds to pay for the electricity and natural gas that must be supplied in the future. In March 2022, ACM already announced that suppliers must comply with additional requirements from October 1. These additional requirements have been laid down in a policy rule that has been published in the Dutch Government Gazette today.

ACM will check whether suppliers are well prepared for the upcoming winter period, and whether they are able to continue to supply natural gas and electricity to consumers in a secure manner. If it turns out that an energy supplier does not comply with the additional requirements, that company will have to come up with a plan of action in which the company explains how it will resolve any outstanding issues as quickly as possible. If a company is no longer able to ensure a secure supply of energy, ACM may decide to revoke that company’s license. Going forward, businesses that wish to launch operations as an energy supplier will be assessed more stringently before being granted a license by ACM.

Cateautje Hijmans van den Bergh, Member of the Board of ACM, explains: “With the additional checks and new requirements, we wish to ensure that energy suppliers become more financially resilient. Those requirements help towards the stability on the energy market. Consumers must be able to be confident that energy suppliers are able to fulfill the contracts they have entered into with consumers. Energy suppliers must do whatever it takes to minimize the risk for financial problems as much as possible. The additional requirements and the intensified oversight do not offer any guarantees that bankruptcies will never occur, but they will lower the risk thereof.”

ACM imposes stricter requirements on the business plans, the financial positions, and the purchasing strategies of energy suppliers. Energy suppliers must also show that they are prepared for price fluctuations on the energy market, for a sudden increase in demand for energy, or for non-payment by customers. Energy suppliers must also have a risk manager.

In addition to the additional requirements that ACM has now imposed under existing regulations, the Dutch Ministry of Economic Affairs and Climate Policy (EZK) has announced that, in the new Dutch Energy Act, it will impose more requirements on suppliers still. With this statutory amendment, ACM will be able, among other things, to check the integrities of executives under the Public Administration Probity Screening Act (in Dutch: wet Bibob) and in connection with certificates of conduct (in Dutch: Verklaring omtrent Gedrag), and energy suppliers each year must submit an assessment declaration of an accountant to ACM.

ACM has laid down the additional requirements for energy suppliers in a policy rule, which has been published in the Dutch Government Gazette. In May 2022, ACM organized a meeting where energy suppliers, market participants, lobby groups, fellow regulators, and the Ministry of EZK discussed various topics such as boosting the stability of energy suppliers and intensifying ACM’s oversight. Energy suppliers, consumer organizations, and other parties involved this summer also had the opportunity to respond to a draft version of said policy rule. In addition, ACM had a survey carried out among consumers to gauge consumer confidence in the energy market. The survey showed that 76% of consumers are positive about the government imposing additional requirements on suppliers.

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