ACM checks whether energy suppliers are ready for the winter period
The Netherlands Authority for Consumers and Markets (ACM) has requested financial data from all energy suppliers in order to check whether they are well-prepared for the coming heating season. ACM checks whether energy suppliers have sufficiently hedged electricity and natural gas to fulfill their existing contracts with consumers. In addition, ACM checks whether suppliers have sufficient funds to pay for the electricity and natural gas that must be supplied in the future.
All suppliers that supply natural gas and/or electricity to consumers as well as other small-scale users must have a license from ACM to do so. At the moment, there are 59 suppliers with a license from ACM. In October 2022, ACM tightened the requirements with which energy suppliers must comply in order to reduce the likelihood of suppliers going bankrupt. If it turns out that an energy supplier does not meet the extra requirements, it will have to come up with a recovery plan for remedying that situation as soon as possible. In addition, ACM is able to impose additional license requirements. If a supplier is no longer able to provide a secure supply of energy, ACM may ultimately revoke the license.
The state of play regarding oversight over suppliers
Over the past year, ACM has rigorously enforced compliance with the tightened requirements with regard to the financial positions and risk management strategies of suppliers. ACM does expect several energy suppliers to implement improvements this fall still in order to ensure they comply with all requirements.
At the moment, ten energy suppliers have been placed under heightened oversight. Four of these suppliers (i.e. DVEP, Qwint, TotalEnergies, and Shell) have announced they want to leave the Dutch market. ACM ensures that these suppliers do so in accordance with the rules. The other six suppliers have been placed under heightened oversight because, for example, they need to improve their administrative systems.
With regard to one of these suppliers, ACM has already established that, following an ACM intervention, it has implemented significant improvements. With regard to another supplier in this group of six, ACM is currently conducting out an extensive investigation into its customer-attraction activities and its financial quality. ACM has conducted a dawn raid at this company, and also took enforcement action recently against too high tariffs and shortcomings in the supplier’s financial quality and its billing process. ACM will publish the supplier’s name as soon as it is allowed to publish the relevant decisions on its website, so that customers will also be informed.
Finally, next to the ten suppliers that have been placed under heightened oversight, five other suppliers have drawn up a recovery plan for improving their financial positions. ACM is currently assessing these plans, and will, where necessary, take action if their financial positions continue to be inadequate. The discussions about the recovery plan of one of these suppliers were recently closed.
Sending bills on time
In the summer of 2023, ACM confronted one in three energy suppliers in the Netherlands with the fact that they did not send annual bills or final bills on time. These suppliers came up with improvement plans for clearing their backlogs as quickly as possible. With regard to approximately half of the energy suppliers contacted by ACM, ACM has seen clear improvements following its intervention. With regard to the other half, the improvements have not yet been sufficient. ACM will conduct new checks in the fall of 2023 to see whether suppliers send their annual bills or final bills within the statutory six-week period. If it turns out that suppliers still do not comply with the rules, ACM can take enforcement action, for example imposing a fine or an order subject to periodic penalty payments.
Making a case for additional measures to protect consumers
In a roundtable discussion in the Dutch House of Representatives about the proposal for the new Dutch Energy Act, ACM made a case for additional measures to protect consumers. ACM has asked the legislature to mandate suppliers to set up a compensation fund for reimbursing advance monthly payments. In addition, in the new Dutch Energy Act also, ACM wishes to retain the power to be able to take enforcement action against unreasonably high tariffs, and ACM made a case for measures for increasing the comparability of contracts. Due to the plethora of energy suppliers and contract types, consumers currently find it difficult to compare options and to make a well-informed choice.
ACM would also like to be granted the power to impose a ban on taking on new customers on suppliers that do not comply with the rules. At the moment, ACM has various instruments to take enforcement action against fraudulent energy suppliers, and it can ultimately revoke the license of a supplier. However, such interventions are preceded by lengthy investigations and legal proceedings. Moreover, revoking a license is not always in the interest of existing customers, as it entails the bankruptcy of the supplier, and customers must be transferred to another supplier swiftly. In order to prevent, in any case, new customers from being harmed, it would be good if ACM were able to swiftly impose a ban on new customers as a temporary measure. In that case, suppliers are not allowed to take on new customers, until they comply with the rules again.