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Highest administrative-law court in the Netherlands confirms ACM’s method for setting maximum tariffs for electricity products

03-03-2020

The Netherlands Authority for Consumers and Markets (ACM) was right in setting maximum tariffs for two electricity products of Dutch energy supplier Nuon, which are Nuon Standaardprijs and Nuon Modelcontract, between January 1, 2017 and July 1, 2017. This means that Nuon (whose parent company is Vattenfall) charged unreasonable tariffs to customers who purchased these products. Furthermore, the method used by ACM for assessing the maximum tariffs was allowed. This has been laid down in a ruling of the Dutch Trade and Industry Appeals Tribunal (CBb), which is the highest administrative-law court in the Netherlands. This ruling can therefore not be appealed.

In late-2017, ACM established that, during the aforementioned period, Nuon charged an unreasonable tariff to approximately 130,000 of its customers who took out said products only (not in combination with natural gas). Nuon went to the CBb to challenge this decision by ACM. At the same time, Nuon compensated all affected customers, irrespective of the outcome of the legal proceedings.

ACM ensures that energy tariffs are reasonable

ACM ensures that energy tariffs for consumers are ‘reasonable.’ Tariffs are considered to be reasonable if energy suppliers sufficiently use the effects of efficient operations towards reducing consumer tariffs. In this situation, ACM had correctly established that this was not the case.

Competition between energy suppliers and the opportunity for consumers to switch result, in general, in lower energy tariffs. As part of its efforts to protect energy consumers, ACM makes sure that their energy tariffs are not higher than reasonable.