ACM supports breaking the link between the natural-gas price and heat rates, and argues for additional measures to protect consumers against too high rates

The Netherlands Authority for Consumers and Markets (ACM) is in favor of breaking the mandatory link between the natural-gas price and the maximum heat rate. Maximum rates based on the actual costs of heat suppliers are more logical and can be explained better to users that often pay high costs now, even though their heat is not generated using natural gas. ACM does warn though that abolishing the no-more-than-otherwise principle (in Dutch: niet-meer-dan-anders principe) does not automatically mean that the rates for users will go down. That is why ACM argues that the Dutch legislature also take additional measures to protect heat consumers against very high rates.

Maximum rates that are based on the actual costs of suppliers are not necessarily lower than the current rates. Heat suppliers incur technical and commercial risks. With cost-based rates, suppliers are allowed to include all of their costs in their rates. As a consequence, rates can suddenly go up significantly if a supplier incurs high costs. That is why ACM finds it important that, in the new system, heat consumers are well protected against high rates. ACM recommends that the legislature take additional measures to that end.

If the legislature decides to abolish the no-more-than-otherwise principle, heat suppliers and ACM will need some time to adjust. In order to be able to set cost-based rates, heat suppliers must submit information in a uniform manner (in accordance with regulatory accounting rules set by ACM). Heat suppliers need to adjust their accounting systems accordingly. That is why introduction of the new regime on January 1, 2025, is not feasible. The adjustments that the Ministry of Economic Affairs and Climate Policy (EZK) announced earlier this week (external website) (in Dutch) can be implemented on January 1, 2025, and are an excellent first step to keep rates for heat consumers under control.

Each year, ACM sets the maximum rates for heat on the basis of the methodology that has been laid down in law for that purpose. In addition, ACM sees to it that heat suppliers do not use the maximum rates to make unreasonable profits. Also each year, ACM publishes a Financial-returns Monitor, and, since last year, has the opportunity to carry out a financial-return assessment if, for example based on reports, ACM suspects that a supplier has earned too high a return.