Price for heat slightly decreases in 2016

The Netherlands Authority for Consumers and Markets (ACM) has set the maximum tariffs of the Dutch Heat Act for 2016. The most important tariff is the maximum tariff for supplying heat. Next year, average households will almost pay as much as they did last year. In total, the annual costs of heat will decrease by EUR 5 to EUR 1,069 for an annual consumption of 35 GJ. This is the result of the drop in the tariff of transmission costs for natural gas, among other reasons. It is one of the parameters ACM uses in its calculation of the heat tariffs. Another key parameter is the price of natural gas. ACM sets the heat tariffs because consumers and businesses are unable to switch heat suppliers or switch to natural gas.

Heat tariffs linked to natural-gas price

Approximately half a million consumers and a share of the small and medium-sized businesses that get their heat from individual-building heating or district heating are affected by the Dutch Heat Act. Consumers that are connected to the heat network will not pay more than they would have paid if they had had a natural-gas connection. This is called the ‘No More Than Otherwise’ principle (in Dutch: Niet Meer Dan Anders). This means that, if the consumer price of natural gas drops, it will affect the price of heat. Energy taxes make up half of the variable gas price. In addition, consumers pay a fixed amount per year, one component of which is a tariff for the transmission of natural gas to their homes. That tariff is set by ACM, and decreases next year, too. The effect thereof on the maximum price of heat is approximately EUR 7 for 2016. All of the changes combined result in, on balance, a decrease of EUR 5 on the annual energy bill.

Energy taxes

The base price of natual gas before energy taxes dropped considerably last year. This would have resulted in, on average, an additional decrease of EUR 96 on the annual energy bill for next year. Henk Don, Member of the Board of ACM, adds: “The Dutch Senate yesterday passed the new tax reform bill. One of the measures in that bill is a 32-percent increase in the energy tax on gas consumption by consumers. This will also have consequences for the 2016 heat tariff. The introduction of these new energy taxes will cost an average household EUR 96 next year. With that increase, the decrease in the base price of natural gas is wiped out.”

Maximum tariffs

For 2016, ACM has set three tariffs (all tariffs include Dutch VAT):

1. The maximum price for supplying heat. This tariff is composed of a fixed amount of EUR 276.13 with a variable tariff of EUR 22.66 per gigajoule.
2. The tariff for metering. This tariff has been set at EUR 24.97 for 2016.
3. The connection fee. For 2016, this tariff has been set at EUR 962.95 for all new connections up to 25 meters from an existing heat network. For connections longer than 25 meters, an additional tariff of EUR 33.87 per meter is added.