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ACM takes action against illegal private networks

Operating private natural-gas or electricity networks is a tremendous responsibility, and it requires a lot of knowledge and expertise. In order to safeguard the safety of networks as well as the rights of consumers, operation of such networks can only be done by designated network operators. The Netherlands Authority for Consumers and Markets (ACM) enforces compliance with these rules, and can take enforcement action if it turns out that a market participant does operate an illegal private network. Following a recent ACM investigation, the operator of illegal natural-gas networks in the northern Dutch province of Friesland has committed itself to ending its operations and to dismantling the networks. In addition, a recent ruling of the District Court of Rotterdam shows that the illegal operation of private networks can have private-law consequences.

Operator of garage-unit parks commits to dismantling illegal natural-gas networks

ACM’s investigation revealed that, in several locations of the operator of garage-unit parks, a single natural-gas connection to the public network was shared with several garage units and business spaces. This created a situation with illegal private natural-gas networks. Following this investigation, the operator has committed to putting the illegal private natural-gas networks out of action as quickly as possible.

District court confirms that the illegal nature can have consequences for civil-law relationships

ACM points out that illegal private networks can also have civil-law consequences for the operators of such networks. This is also evidenced by a recent ruling of the District Court of Rotterdam concerning a business that operated an illegal network, and supplied energy without a license. As a result, consumers were, for example, not able to choose their own energy suppliers. The court ruled that this practice violated the law, and annulled all agreements between the operator of the illegal network and its consumers. In addition, the court mandated the operator of the private network to allow consumers to choose their own suppliers.

Preventive strategy towards illegal private networks

In order to prevent market participants from operating networks illegally, ACM in July 2021 reminded everyone of the prohibition of illegal private networks for natural gas and electricity. ACM at the time created a decision tree that consumers, businesses, trade associations and network operators can use to assess prior to the construction of a network whether an illegal situation will occur. Designated network operators can also contact ACM if they suspect that an application for a new gas or electricity connection might constitute the construction of an illegal private network.

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