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ACM: consumers and businesses save 2.1 billion on energy costs

The tariffs that network operators charge their customers (consumers and businesses) will be sharply reduced over the next three years. Consumers and businesses thus save EUR 2.1 billion on energy costs. The tariff reduction will have a considerably more favorable impact than what had been projected, the Netherlands Authority for Consumers and Markets (ACM) announced today following the publication of the energy method decisions for the tariffs for the period of 2014-2016.

Benefits for consumers greater than projected

With regard to electricity, the tariffs of regional network operators will decrease, on average, by 8 percent annually, and those of transmission operator TenneT by 7 percent. With regard to natural gas, the tariffs of regional network operators will decrease, on average, by 6.5 percent annually, and those of transmission operator GTS by 5 percent. Over the next three years, consumers will save in total approximately EUR 2 billion. Based on preliminary data from network operators, ACM previously projected savings of at least EUR 500 million. That was a conservative projection.  ‘It is possible for the tariffs to decrease because it has become cheaper for network operators to borrow capital for investments. Interest rates are currently quite low,’ says Henk Don, Member of the Board of ACM. ‘As a result, the costs that consumers incur are able to go down, while at the same time network operators continue to have enough room to make investments in a future-proof network. This is a good balance, where the security of supply in the Netherlands can continue to be reliable and affordable.’

Steps towards sustainable energy

ACM is aware of the additional investments that energy companies are planning to make over the next several years, for example, towards more sustainable energy. What these plans exactly entail is, as of yet, still unclear, but, based on the method decisions, network operators will be able, in various scenarios, to help make the energy supply more sustainable. Energy regulations will offer enough room for the inclusion of investment costs.

Regulation of network tariffs

As energy regulator, ACM sets the maximum network tariffs because network operators are active in a market without any competition. For an average household, network tariffs account for a fifth of the total energy bill. The energy bill that consumers receive consists of an amount for energy consumed and of a fee for operation, maintenance, and renovation of cables and pipes, which together make up the energy network.