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Order subject to periodic penalty payments imposed for private operation of energy network

29-03-2019

The Netherlands Authority for Consumers and Markets (ACM) has ordered André De Moor Holding BV to appoint, no later than 26 April, a public system operator for the operation of its electricity grid and natural-gas network. If De Moor fails to do so, the company will have to pay penalty payments of 1,000 euros per day with a maximum of 100,000 euros.

Users have filed complaints

De Moor operates a private electricity grid and gas network in a business park in the northern city of Leeuwarden. Users of the commercial units in this park are thus not free to choose their own energy suppliers, and De Moor sets the level of the energy transmission costs. In addition, the safety of the network is not guaranteed. Users had filed complaints with ACM.

Private operation of electricity and gas networks is only allowed if ACM has granted the owner an exemption. ACM only grants such exemptions if the connected customers have to be connected to each other for technical or safety reasons, or if the energy is largely used by the owner of the network and its affiliates.

Appointing a system operator

In May 2018, ACM called on De Moor to appoint a public system operator no later than September 2018. This means that De Moor has to write a letter to a public system operator, in which they indicate that they wish to transfer operation of the network. De Moor has failed to do so, and that is why ACM has imposed an order subject to periodic penalty payments. If De Moor appoints a public network operator, customers will be able to choose their own energy suppliers, and ACM will set their energy transmission rates. In addition, the appointed system operator will ensure that the network will comply with statutory safety requirements.