Of Thanks to Floudopoulos
The electricity suppliers expressed their opposition to RAE’s proposal for the adoption of standard bid application forms and tariffs for electricity bills in the context of the public consultation conducted by the Regulator.
At the same time, the suppliers disagree with the proposal of RAE to characterize the retail tariffs on the basis of the price risk, ie on the basis of the size of the increases that may be caused by the increase of the wholesale cost.
For the complete information of the consumers, some companies suggest to include in the bills two forms that will expand the information that should be included.
Contrary to the suppliers, the Association of Industrial Energy Consumers is in favor of RAE’s proposals, while the consumer organization EKPOIZO is in line with both the standardization of the pre-contractual information form and the categorization of tariffs based on risk.
Not in standardization
With regard to the standardization of electricity bills, the Association of ESPEN suppliers states that in no case does the Community Directive state that the establishment of uniform bills or other forms is the appropriate way to achieve the goal of enhancing the transparency and comprehensibility of invoices. The letters from PPC, IRON, Mytilineos, Volterra, Volton are on the same wavelength.
The suppliers are opposed to RAE’s proposal for classification of tariffs based on risk. RAE considers that only fixed tariffs should be characterized as zero risk invoices.
“Marginal risk” tariffs will be defined as floating tariffs which, although they include a supply charge adjustment clause, which may nevertheless cause a maximum increase limit, which the consumer will be aware of in advance.
In contrast, “high risk” tariffs will include tariffs without a surcharge. Therefore, in these supply contracts, there will be no ceiling on the additional charge that the adjustment clause may incur.
According to the suppliers, however, the use of the term “risk” is misleading, as it constitutes an evaluative judgment of the tariffs, consequently creating the false impression that certain products are objectively superior to the rest.
Thus, as they argue, it is possible that this categorization will turn consumers to choices that will ultimately prove to be economically unprofitable.
ESPEN and Heron typically state that a fixed invoice with a commitment of 2 years and a zero risk rating could look attractive to the consumer compared to a high risk invoice.
However, in the event of de-escalation of current high prices, it could be detrimental to the consumer as energy will be supplied at prices much higher than the floating tariff.
PPC, for its part, emphasizes that the use of the term risk prejudices the consumer negatively.
Finally, for its part, Mytilineos considers that this categorization will work discouragingly for the consumer.
The company notes that the retail market continues to be plagued by hyper-concentration phenomena, pointing out that any directional regulation towards the choice of specific types of invoices (eg fixed invoice) should always be considered in conjunction with both the pricing policy of each provider and the its overall reliability in terms of its financial obligations.
Mytilineos cites as an example a fixed tariff of the dominant supplier which is compared to the total energy cost of the suppliers and is lower.
As most suppliers are unable to compete with these price levels, the adoption of such policies leads to increasing and re-movement of consumers to PPC, resulting in greater market closure and further weakening of competition in the retail market, the retailer said. letter.
Source From: Capital