Market Design Trilogues: Do not leave Consumers in the Dark

The “trilogue” negotiations between the European Parliament, the Council and the Commission on the “Market Design” proposal started at the end of June. A final agreement on the text should be reached at the end of this year. In this context, we would like to remind legislators that strong consumer-protection and out-of-court dispute settlement provisions are essential if we want to create trust and promote consumer participation in the energy market.

In its report adopted in February, the European Parliament strengthened the provisions on consumer protection and right to out-of-court dispute settlement. These amendments need to be kept if we want to make sure consumers are not “left in the dark” whenever a problem occurs with their energy service provider.

What is the issue?

In its initial proposal, the Commission required that Member States “ensure that customers have access to simple, fair, transparent, independent, effective and efficient out-of-court dispute resolution mechanisms for the settlement of disputes”. While this provision is a good start, it needs to be further specified in order to be truly effective.

The right to access to essential services, including energy, is a right enshrined in EU law. Member States need to make sure this right is respected and fostered. In this sense, out-of-court dispute resolution has a strong role to play: not only does it help consumers to exercise their rights (for example by avoiding disconnections) but it is also a way for Member States to get first-hand insights into the issues consumers face, and to put them straight in a fast and efficient way.

NEON members provide free and easy assistance to customers, aggregate data on complaints, identify systemic issues and engage with market actors to “put things right”. They therefore go further than the requirements of the EU Directive on alternative dispute resolution (Directive 2013/11/EU on ADR), which mainly sets quality standards for all kinds of dispute-resolution bodies.

What is needed?

First of all, legislators will need to make sure that energy consumers’ rights are respected, not only through the general quality requirements laid down in the ADR Directive, but also through more specific arrangements, namely through national or regional dispute settlement bodies that report to public authorities and are accountable to the public and citizens at large. This needs to be made explicit in the text. In public service sectors, ADR cannot be left to a series of market players but needs to be managed and overseen by public authorities.

Second, in order for ADR to work properly and be credible towards consumers, traders need to participate. While, in most cases, most of the companies do cooperate, those who do not cooperate cannot be let to “get away with murder”. This is why company participation needs to be made mandatory in all Member States (in the energy sector, this is already the case in some Member States). Making the participation of companies mandatory does not prevent the consumer nor the company from bringing the same case to court and does, above all, avoid that consumers are left on their own whenever a company does not want to engage in out-of-court dispute resolution.

Finally, legislators should make sure that all consumers are informed about their rights and about where to go in case a problem should occur, not only through their bills but also through other means of communication. Not all energy services of the future will require regular billing, and it should not be forgotten that sometimes bills do not reach the consumer when they should.

The aim of the Clean Energy Package was to make consumers active and central players on the energy markets of the future. This needs rules allowing for new market players and services to enter the market, but also strong provisions to protect all consumers, be they active or not. Let us hope we will not fail this aim.