ERGEG Position Paper on End-user Price Regulation

Following its June 2007 status review of end-user price regulation among EU Member States, this ERGEG Position Paper presents the following messages:

1. Regulated end-user energy prices distort the functioning of the market and jeopardise both security of supply and the efforts to fight climate change. Therefore end-user price regulation should be abolished.
2. Protecting “vulnerable customers” remains necessary in a competitive market but the protection of “vulnerable customers” should not be confused with maintaining regulated prices for all (or certain categories of) customers. The tools used for the protection of vulnerable customers must work in line with and support the pre-requisites of open, competitive markets.
3. Transition periods towards well functioning competition (e.g. co-existence of regulated and market prices) may be necessary to protect customers from potential abuses of dominant positions. It is essential that countries in a transition period draw up an individual road map. ERGEG calls on Member States to rapidly remove regulated prices and to outline (by 1 July 2008) a roadmap towards competitive markets by removing regulated prices.
4. Even in Member States where there is only one supplier, ERGEG urges the Member State governments and regulators to act rapidly so as to create an environment to attract the new entry of suppliers by removing regulated end-user prices.