Opinion of the European Economic and Social Committee on the Communication from the Commission: Towards a European Charter on the Rights of Energy Consumers COM(2007) 386 final
Date: 2008-01-17
Institutions: European Economic and Social Committee
Subjects: European charter, consumer protection, energy consumption, energy policy

17.6.2008

EN

Official Journal of the European Union

C 151/27

4.12.1
Firstly, from the broad legislative policy point of view,
once the proposed legislation has been adopted, budget alloca-
tions should be provided in line with the provisions of Commis-
sion Communication COM(2006) 129 in order to facilitate,
where appropriate, the creation of the necessary infrastructure
in Member States lacking a suitable network of base stations.
This must, however, be without prejudice to the special care
that should be taken to protect the environment, so that such
steps do not entail environmental impact costs.

4.12.2
Secondly, current Community legislation on public
procurement and concessions must be adjusted in order to guar-
antee that any concessions granted by Member States for the
use of radio spectrum meet conditions of transparency, non-
discrimination and protection of the general interest.

4.12.3
legal aspect of pan-European radio spectrum must

Thirdly, the comitology decisions supplementing the
include

specific provisions to ensure that current Community law on
electronic accessibility is applied across the board. More specifi-
cally, such decisions will have to be concerned with the full
exercise of the rights of the disabled, the elderly and citizens
with little or no digital training, if progress in the digital field is
to be properly harnessed, according to the provisions of
Commission Communication COM(2007) 694.

To this end, a range of incentives — to be determined
4.12.4
at the appropriate time — could be devised to encourage the
telecommunications industrial sector and the Member State
authorities, especially at regional and local
in order to
contribute to general access for citizens to every technological
progress.

level,

4.13
It is likely that the new technical conditions will have
been produced without any further unnecessary financial or
administrative burden at Community, national or regional level.

Brussels, 16 January 2008.

The President

of the European Economic and Social Committee

Dimitris DIMITRIADIS

Opinion of the European Economic and Social Committee on the Communication from the
Commission: Towards a European Charter on the Rights of Energy Consumers

COM(2007) 386 final

(2008/C 151/09)

On 5 July 2007,
the European Commission decided to consult
Committee, under Article 262 of the Treaty establishing the European Community, on the

the European Economic and Social

Communication from the Commission — Towards a European Charter on the Rights of Energy Consumers

On 25 September 2007, the Committee Bureau instructed the Section for Transport, Energy, Infrastructure
and the Information Society to prepare the Committee's work on the subject.

Given the urgent nature of the work, the European Economic and Social Committee appointed Mr Iozia as
rapporteur-general at its 441st plenary session, held on 17 January 2008, and adopted the following opinion
by 127 votes to 1 with 3 abstentions.

1. Summary of the EESC's comments and recommenda-

tions

1.1
The European Economic and Social Committee welcomes
the Commission's initiative to establish a European charter on
the rights of energy consumers.

The EESC believes that, where possible, the enactment of
1.3
non-binding legislation should be avoided. The EESC concurs
with the European Parliament
resolution and believes that
binding legal measures are needed to protect the rights of citi-
zens, and that soft law measures do not fully achieve their aims.
In the case of passenger rights, the Commission considered it
necessary to enact a regulation, 261/2004 EC of 11 February
2004. It is not therefore clear why the rights of energy custo-
mers should be relegated to a non-binding document.

The EESC considers the charter to be a first step to make
1.2
the rights of consumers stronger and more effective. As the
Commission rightly points out, these are not protected if they
are left to market forces alone.

1.4
proposed changes

The EESC calls on the Commission, aside from the
currently undergoing

to the directive

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approval, to look immediately into transforming the charter
into a regulation on rights for European energy consumers.

1.5
The EESC believes that the rights enshrined in the direc-
tive should apply to all end users, in particular households and
small and medium-sized enterprises. The electricity directive
(2003/54) leaves it up to Member States whether or not to guar-
antee universal service, i.e. the right to an electricity supply of a
specified quality at prices that are reasonable, easily and clearly
comparable, and transparent, to small enterprises (with fewer
than 50 employees and a total turnover of not more than 10
million euro).

1.6
The EESC believes that this unequal treatment is in no
way justified, and that the right to universal service should
apply at least to small and medium-sized enterprises throughout
the EU. To achieve this, given that the third energy package,
which is currently under consideration by the EESC, amends
electricity directive 2003/54, the Committee strongly recom-
mends that the Commission amend Article 2 to this effect, or
broaden the scope of the Charter of Rights to include non-
domestic customers.

the customer of

The EESC considers it essential that ‘consumer’ should
1.7
mean the final consumer,
the energy
i.e.
supplier. The change in terminology between the Communica-
tion entitled An energy policy for Europe, which talks about an
Energy Customers' Charter, and the proposal under discussion
for a charter on the rights of energy consumers, creates uncer-
tainty and confusion. Given the importance of a reliable and
sufficient energy supply for the commercial operations of small
and medium-sized enterprises, this deserves appropriate atten-
tion, especially in convergence and cohesion regions.

1.8
The universal service guarantee, extended to small and
medium-sized enterprises, fulfilment of public service obliga-
tions, the protection of economically disadvantaged groups at
risk of ‘fuel poverty’, economic, social and territorial cohesion,
contractual freedom, the right to information, the right to be
connected without delay, to have clear contracts and prices that
are reasonable, easily comparable between different suppliers
and transparent,
the guarantee of a continuous supply, and
awareness of the energy sources used, are all matters of the
utmost
to
point out that the market, left to its own devices, cannot muster
the required level of social, environmental and economic aware-
ness. The EESC wholeheartedly supports any initiative that goes
in this direction simply and effectively, and calls on the
Commission to use all of the most appropriate instruments.

importance. The Commission is absolutely right

1.9
The EESC recommends that consideration be given to
whether it would be appropriate to bring within the scope of
the third energy package further amendments to Annex A of
the electricity directive, other than the three already planned.

At the end of 2001, the EESC suggested turning the
1.10
‘European Regulators Group for Electricity and Gas’ (ERGEG)
into an Agency. It is pleased that the Commission has now
implemented this proposal within the framework of the third

energy package, and hopes that verifying the proper application
of consumer rights, in particular the protection of vulnerable
consumers, will be part of the future Agency's remit. The EESC
supports the involvement of consumers' associations, small and
medium sized enterprises, the industry and trade unions, thus
emphasising cooperation and shared responsibility, as has
already happened in the transport sector. A European round
table, giving the Agency powers to intervene in and regulate the
relationship between producers and end users, could be of
considerable help in achieving the objectives. National regula-
tors, for their part, should supervise markets in accordance with
their remit.

1.11
The EESC welcomes the Commission's proposals set
out in the annex to the Communication. If implemented effec-
tively, these would strengthen the rights of consumers. In par-
ticular, it notes that the rights of public service and universal
service will be effectively guaranteed, by identifying the supplier
of
last resort, which can step in if problems arise with the
production of energy by a trustworthy supplier.

the

Uniform rules
transparency,

for
regards
1.12
contracts:
implementing provisions, clear and
non-burdensome handling of disputes, and compensation must
be uniform to promote the cross-border mobility of consumers
and open the European market to end consumers as well.

single market

as

1.13
Reasonable, transparent and comparable prices. Under-
information for
standable, detailed invoices containing useful
consumers on the energy sources used for electricity production,
on emissions of CO2 and other greenhouse gases, suggestions
for saving energy, in line with Community policies.

1.14
Freedom to choose a supplier and to change supplier
without undue delay or red tape, imposition of a limit on the
minimum duration of contracts, are rights that go hand in hand
with the completion of the market.

1.15
Information. Truthful, complete, with easily-understand-
able conditions of access and use, on charges, prices, and
changes thereto.

1.16
In the area of complaints, it would be appropriate to
make a firm choice in favour of extra-judicial conflict resolution,
implementing Commission recommendations 98/257 and
2001/310.

The right to representation, via consumers' associations,
1.17
must be made stronger and more effective. An open round table
hosted by the new agency could be a forum for bringing
together all the relevant stakeholders and to find the most ideal
solutions to make consumer rights effective.

Fuel poverty means exclusion from a dignified life. It
1.18
would be helpful
to harmonise the definition of vulnerable
consumers and the measures adopted to support them, avoiding
the interruption of supply through a minimum service guar-
antee but also through the free provision of energy. The prin-
ciple of responsibility should always be preserved.

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Effective measures must be

1.19
taken against unfair
commercial practices, by updating the provisions relating to
these in Annex 1 of Directive 2005/29/EC of 11 May 2005.
Other unfair practices could be identified via the regulatory
route, rather than amending the directive.

The EESC suggests that, as well as the new areas
1.20
proposed by the Commission, consideration be given to those
covered by some charters already signed by suppliers and consu-
mers' associations, as has happened, for example, in some EU
countries: the consumer's right to time, the right to participa-
tion and representation, the right to quality and safety, the right
to the best price, the right to compensation and a rapid and
effective conciliation procedure.

2. Introduction: The Commission document

In its Communication of 10 January 2007 (1), (2), the
2.1
Commission announced its intention to publish a charter on the
rights of ‘customers’ of gas and electricity suppliers. This was
endorsed by the Spring Council of 8-9 March, which requested‘-
Better consumer protection, e.g. through the development of an Energy
Customers' Charter’.

2.2
Recognising that market mechanisms alone cannot guar-
antee respect for the interests of consumers, the Commission
points out that the existing directives already provide for public
service obligations and guarantee consumer rights. Action on
monitoring implementation and ‘effective’
enforcement of
consumer rights and on reinforcing and extending those rights
is announced.

2.3
The completion of the liberalisation of energy and gas
markets on 1 July 2007 is the right time to launch an appro-
priate public information campaign, involving consumer organi-
sations, on the advantages that should flow from the ability to
choose a supplier and to continue enjoying the same rights.

Energy is essential for every European. The improved
2.4
safeguard and reinforcement of consumer interests on a par
with corporate interests is a prerequisite for a well functioning
internal market.

already

Existing

European

legislation

2.5
requires
compliance with public service obligations, which are a
fundamental requirement of energy legislation. The priorities of
sustainable development, of protecting the environment, consu-
mers, and the most vulnerable sections of society, mean that
public service obligations are a necessary addition to competi-
tion. ‘Well targeted universal and public service obligations for energy
consumers must remain at the heart of the market-opening process.’

2.6
The European Union needs to go further in tackling
‘energy poverty’. The rising prices of fuels on the international
markets are impacting on energy prices, creating growing
problems for the weakest sections of European society. The
Member States have not done enough about this: only five of
them have tariffs for economically disadvantaged users. The
future Charter will have to set out suitable ways of protecting
the most vulnerable consumers.

The key goals. The four goals already proposed by the

2.7
Commission are repeated (3):

— assist in establishing schemes to help the most vulnerable citizens

deal with increases in energy price;

— improve the minimum level of information available to citizens to
help them choose between different suppliers and supply options;

— reduce paperwork when consumers change supplier;

— protect consumers from unfair practices.

The future European Charter on the Rights of Energy

2.8
Consumers will not be a legal document. It is to include:

a) existing Community legislation granting consumer rights and obli-

gations of energy providers;

b) possible elements that should be taken into account by Member
States authorities (governments or regulatory authorities) in imple-
menting and applying that legislation;

c) possible elements which might supplement existing rights and

which fall within the responsibility of Member States;

d) possible elements which might supplement existing rights and
which could be achieved through self-regulation by private stake-
holders, i.e. the industry and consumer representatives.

New key points to be covered by the Charter are identi-

2.9
fied:

— Connections

— Contracts

— Prices, tariffs, and monitoring

— Free choice of supplier

— Information

— Complaints

— Representation

— Social measures

— Unfair commercial practices.

2.10
According to the principle of shared responsibility, all
the interested parties: the Community, the Member States, the
energy industry, representatives of all the social partners and
consumers associations need to help secure a successful,
consumer-oriented energy policy.

(1) An energy policy for Europe. COM(2007) 1.
(2) Prospects for the internal gas and electricity market COM(2006) 841.

(3) An energy policy for Europe. COM(2007) 1, p. 10.

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the annex sets out

For each key point,

2.11
the rules
currently in force and the initiatives that could be taken by the
Commission,
through agreements
between the interested parties or self-regulatory codes of prac-
tice.

the Member States, or

However,

3.2.2.1
it points out that the various forms of
consumer protection adopted in the individual Member States
cannot yet be said to guarantee the provisions of the directives
currently in force as universally recognised rights. The so-called
non-binding nature of
together
requirements on some issues with options for self-regulation
and moral persuasion of Member States and suppliers, risks
creating confusion.

the Charter, which brings

3. General comments

3.1
The EESC proposes to consider the following aspects: the
legal framework; who is covered by the Charter; the efficacy and
proportionality of the Commission proposal and the appropri-
ateness of other possible instruments; the role of the Agency
and of national regulators; other proposals or initiatives of a
general or specific nature.

3.2.2.2
The European Parliament Resolution of 4 September
2007 on the institutional and legal implications of the use of
‘soft law’ instruments states, in recital X: ‘where the Community
has legislative competence, but there seems to be a lack of poli-
tical will to introduce legislation, the use of soft law is liable to
circumvent the properly competent legislative bodies, may flout
the principles of democracy and the rule of law under Article 6
of the EU Treaty, and also those of subsidiarity and proportion-
ality under Article 5 of the EC Treaty, and may result in the
Commission's acting ultra vires.’

The legal framework

Article 38 of the European Union Charter of Funda-
3.2
mental Rights, which covers consumer protection, states that
‘Union policies shall ensure a high level of consumer protection’.
This article is based on Treaty Article 153, which tasks the
Community with ensuring a high level of consumer protection,
and promoting consumers' right to information and to organise
themselves in order to safeguard their interests.
In addition,
consumer protection requirements must be taken into account
in defining and implementing other Community policies and
activities.

3.2.1
The Treaty of Amsterdam, which reworded the former
Article 129 A of the treaties into the current Article 153, firmly
established the Community's
in the area of
consumer protection (4).

competence

The EESC welcomes the Commission's decision to
3.2.2
strengthen the rights of consumers and to collate both the
measures currently provided for under Community legislation (5)
and the proposals for future initiatives that might be taken at
various levels in a Charter on the Rights of Consumers.

(4) The Treaty of Amsterdam, dated 4 October 1997, revises the previous
text, which had given the Commission only a coordinating role subor-
dinate to that of the Member States in the area of consumer protection.

(5) Annex A of the Electricity Directive and the Gas Directive

Council Directive 93/13/EEC of 5 April 1993 on unfair terms in
consumer contracts
Articles 3(3), 3(5) and 3(6) of the Electricity Directive
Article 3(3) of the Gas Directive
Articles 13(1) and 13(2) of Directive 2006/32/EC of 4 April 2006
on energy efficiency
Commission Recommendation 98/257/EC on the principles applic-
able to the bodies
settlement of
consumer disputes
Commission Recommendation 2001/310/EC on the principles for
out-of-court bodies
resolution of
consumer disputes
Directive 98/27/EC of 19 May 1998 on injunctions for the protec-
tion of consumers' interests
Directive 2005/29/EC of 11 May 2005 on unfair business-to-consumer
commercial practices.

responsible for out-of-court

involved in the

consensual

the resolution,

In point 1 of

tabled by Manuel
3.2.2.3
Medina Ortega MEP (6), the Parliament ‘considers that,
in the
context of the Community, soft law all too often constitutes an
ambiguous and ineffective instrument which is liable to have a
detrimental effect on Community legislation and institutional
balance and should be used with caution, even where it is
provided for in the Treaty’ and, in point 8, specifically ‘calls on
the Commission to give special consideration to the effect of
soft law on consumers and their possible means of redress
before proposing any measure involving soft-law instruments’.

3.2.3
The EESC suggests that a distinction be made between
enforceable ‘rights’ and other forms of protection, with the
future Charter clearly distinguishing existing rights from the
other proposals for initiatives that will or might be taken at
various levels, which are considered desirable but not binding.

3.2.3.1
The EESC wonders, in the light of experience to date,
which the Commission itself describes as unsatisfactory, and in
the light of the powers conferred on the Commission by the
Treaties, whether it might not be more appropriate to look at
introducing a few new, clear rules to strengthen consumer
protection, in particular as regards the most vulnerable consu-
mers. The subsidiarity principle set out in Treaty Article 5, so
often mistakenly quoted to oppose Community initiatives,
should in this instance apply in support of decisions that benefit
consumers, in the absence of effective national legislation.

Who are consumers?

The EESC highlights the uncertainty of the legal frame of
3.3
reference as regards identifying those to whom the Charter and
the associated rights apply within the scope of the various Euro-
pean legislation. The Communication ‘An energy policy for
Europe’ (7) states:
‘The Commission will develop an Energy
Customers' Charter’.

(6) Resolution P6_TA(2007)0366, 4 September 2007.
(7) Point 3.1.7, op. cit.

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3.3.1
Article 2(7) of Directive 2003/54/EC of 26 June 2003
defines ‘customers’: wholesale and final customers of electricity;
‘final customers’: customers purchasing electricity for their own
use; ‘household customers’: customers purchasing electricity for
their own household consumption; and ‘non-household custo-
mers’: any natural or legal persons purchasing electricity which
is not for their own household use, [including] producers and
wholesale customers.

3.3.2
Directive 2005/29/EC of 11 May 2005 concerning
unfair business-to-consumer commercial practices in the internal
market is cited by the Commission as a legal reference source
for the part of the Charter relating to the right of consumers to
have fair and transparent relations with their suppliers. Article 2
(a) of the Directive defines a ‘consumer’ as any natural person
who, in commercial practices covered by this Directive, is acting
for purposes which are outside his trade, business, craft or
profession.

3.3.3
The EESC believes that the rights enshrined in the
directive should apply to all end users, in particular households
and small and medium-sized enterprises. The electricity directive
leaves it up to Member States whether or not to guarantee
universal service, i.e. the right to an electricity supply of a speci-
fied quality at prices that are reasonable, easily and clearly
comparable, and transparent, to small enterprises (with fewer
than 50 employees and a total turnover of not more than 10
million euro).

3.3.4
The EESC believes that this unequal treatment is in no
way justified, and that the right to universal service should
apply at least to small and medium-sized enterprises throughout
the EU. To achieve this, given that the third energy package,
which is currently under consideration by the EESC, amends the
electricity directive 2003/54, the Committee strongly recom-
mends that the Commission amend Article 2 to this effect, or
to broaden the scope of the Charter of Rights to include non-
domestic customers.

the customer of

The EESC considers it essential that ‘consumer’ should
3.3.5
mean the final consumer,
the energy
i.e.
supplier. The change in terminology between the Communica-
tion entitled An energy policy for Europe, which talks about an
Energy Customers' Charter, and the proposal under discussion
for a charter on the rights of energy consumers, creates uncer-
tainty and confusion. Given the importance of a reliable and
sufficient energy supply for the commercial operations of small
and medium-sized enterprises, this deserves appropriate atten-
tion, especially in convergence and cohesion regions.

The efficacy and proportionality of the proposal

The EESC considers the proposal to publish a Charter on
3.4
the Rights of Energy Consumers to be important because of the
impact it may have on public opinion, opening up the debate
the internal market, and
immediately after

the opening of

increasing users' awareness of the energy market. However, this
instrument appears weak in that, unlike the case of transport,
where the Passenger Rights' Charter contains clear references to
rights and equally clear references to compensation due, the
Charter in the Commission proposal would not be binding in
those parts that are already covered by
nature, except
for
previous directives.
than a
It would be a directory, rather
strengthening, of rights. The expectations raised by Commis-
sioners Piebalgs' and Kuneva's statements at the presentation of
the document under consideration may be disappointed.

3.4.1
‘EU consumers expect us to shape a common European
response to energy and climate change challenges’, said EU
Energy Commissioner Andris Piebalgs. ‘And as well as providing
them with a sustainable, secure and competitive energy supply,
they expect the EU to work to protect consumers' rights as
energy markets are opened up to greater consumer choice. This
is where the proposed Energy Consumers' Charter comes in.’

3.4.2
‘The opening of these markets represent both a chal-
lenge and an opportunity for European consumers’, said EU
Consumer Commissioner Meglena Kuneva. ‘Only when we have
succeeded in creating a transparent and efficient market where
consumers' rights are fully safeguarded and informed consumers
use their knowledge to take advantage of the offers available,
can we conclude that we've reached our goal.’

3.4.3
The EESC concurs with the European Parliament reso-
lution and believes that binding legal measures are needed to
protect the rights of citizens, and that soft law measures do not
fully achieve their aims. In the case of passenger rights, the
Commission considered it necessary to enact a regulation,
261/2004 EC of 11 February 2004. It is not therefore clear
why the rights of energy customers should be relegated to a
non-binding document. A Charter is being published because
the rights that currently exist are not properly respected. Apart
from a few praiseworthy exceptions, transposition into national
law has been deficient. The Commission has the power and the
responsibility to intervene, but prefers a non-binding instru-
ment, even though it knows full well that the market alone is
not in a position to provide appropriate and adequate solutions.

It should reflect

3.4.4
the Commission report (8) on the
operation of the regulation on passenger rights, which states
‘After more than two years of application of…Regulation
[(EC) 261/2004], progress has been made but
substantial
improvement is necessary if more consistent application of the
rules by airlines and more consistent enforcement of the rules
by the Member States are to be achieved. In contrast with the
past, stranded passengers now have specific rights, but too often
they are in a weak position compared to the airlines.’ It is clear
that, even though its requirements are binding, the airlines are
not complying with the provisions of the directive. Why should
gas and electricity suppliers be expected to do so when faced
with a non-binding Charter?

(8) 4.4.2007 COM(2007) 168 final.

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3.4.5
Drawing on past experience gained in this and other
economic sectors, the EESC considers it appropriate to recom-
mend the adoption of legal measures that fully guarantee the
rights of consumers. The proportionality of a proposal is based
on the extent to which it achieves the desired objectives and on
the need for legislative acts. In this case, despite having the
powers
the Commission prefers a
different approach. The EESC believes that the choice of instru-
ment is objectively inadequate to achieve the stated objectives.
The Charter can at best be a first step, but the European legis-
lator needs to move towards strengthening rights in an effective
manner.

to propose legislation,

3.4.6
The universal service guarantee, extended to small and
medium-sized enterprises, fulfilment of public service obliga-
tions, the protection of economically disadvantaged groups at
risk of ‘fuel poverty’, economic, social and territorial cohesion,
contractual freedom, the right to information, the right to be
connected without delay, to have clear contracts and prices that
are reasonable, easily comparable between different suppliers
the guarantee of a continuous supply, and
and transparent,
awareness of the energy sources used, are all matters of the
utmost
to
point out that the market, left to its own devices, cannot muster
the required level of social, environmental and economic aware-
ness. The EESC wholeheartedly supports any initiative that goes
in this direction simply and effectively, and calls on the
Commission to use all of the most appropriate instruments.

importance. The Commission is absolutely right

The role of the Agency and of the national regulators

3.5
The EESC welcomes the proposed regulation, contained
within the third energy package, establishing an Agency for the
Cooperation of Energy Regulators (9).
In its opinion of
17 October 2001 on the second energy package (10),
the
Committee called on the Commission ‘after an assessment of its
operation, to consider transforming this Council [ERGEG] at
some future date into a European Agency or similar body, with
responsibility for matters relating to international transport in
electricity and natural gas’. The Committee is pleased at having
proposed the creation of the Agency so far ahead.

the following areas:

3.5.1
The Commission Communication on Prospects for the
internal gas and electricity market (11) announces a strengthening of
the directives that relate to the powers of national regulators. In
point 2.2.1, the Commission ‘considers that regulators need
strong ex-ante powers over
[…] vii)
consumer protection including any end-user price controls’.
Sadly, there is no trace of that ‘strengthening’ in the documents
relating to the third energy package. Some powers of regulatory
authorities are indeed strengthened in the new chapter VII a of
the new Energy Directive: regulators are asked to ensure ‘high
standards of universal and public service for electricity [and
gas], the protection of vulnerable customers, and that consumer
protection measures set out in Annex A are effective’, but these

(9) 19.9.2007 COM(2007) 530 final.
(10) OJ C 36, 8.2.2002, p. 10 (rapp. Mr Hernández Bataller).
(11) 10.1.2007 COM(2006) 841 final.

powers have already been given to almost all regulatory authori-
ties.

In the new Energy Directive,

3.5.2
the Commission also
proposes an amendment to Annex A, adding three paragraphs.
One relates to the right to access to consumption data, the
second to the right to be properly informed every month of
actual electricity consumption and costs, and the third to the
right to change supplier at any time. The EESC welcomes the
proposal, but wonders why, given that it could have taken more
weighty initiatives, the Commission did not use the main instru-
ment, i.e. the revision of the directive, to achieve its stated aim
of strengthening the rights of consumers.

The Commission proposal to amend Article 3 by
3.5.2.1
adding a new paragraph 10, which assigns some parts of the
regulation to the comitology procedure, could be the ideal
instrument
for strengthening the rights of consumers, since
Committee decisions relating to matters assigned to them enter
into effect immediately. The EESC recommends that the Euro-
pean institutions adopt this point of the Commission proposal.

The annex to the Communication Towards a European
3.5.2.2
Charter on the Rights of Energy Consumers sets out, in addition to
existing rights (which are difficult to enforce), a few ideas for
new rights in the future. Including these proposals in Annex A
would be a first step towards making them binding and would
then prepare the ground for the adoption of a specific regu-
lation protecting the rights of final consumers.

The EESC believes that the future tasks of the European
3.5.3
Agency should also include monitoring respect for consumer
rights. In relation to this, provision should be made for the
involvement of consumers' associations, small and medium
sized enterprises, the energy industry and trade unions, thus
emphasising cooperation and shared responsibility, as has
already happened in the transport sector.
In other words, a
European round table, giving the Agency powers to intervene in
and regulate the relationship between producers and end users.

3.5.3.1
In the institutional order, the agency will need to
have binding powers within the limits of its remit. It will be
made up of representatives of the national regulatory authorities
and will set up technical committees involving all the national
regulators. The EESC hopes that
its remit will also cover
consumer protection, in consultation with the round table. This
would make it possible to act more effectively to achieve the
objectives set by the Commission in the Charter of Rights. As
long ago as 2001, the EESC highlighted ‘the need for these
authorities to operate in a more transparent and democratic
way by allowing the various agents involved in the electricity
and natural gas markets (i.e. consumers, workers and compa-
nies) to participate in the decision-making process’ (12).

3.5.3.2
National regulators, for their part, will be able to
participate actively in setting a generalised protection strategy
and will have more power to ensure compliance with the law.

(12) Point 6.7.4. op. cit.

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4. Specific comments

In its opinion on the 2001 Energy directive (13),
4.1
the
Committee welcomed the fact that the Commission considered
meeting public service objectives as one of
its fundamental
objectives and that this should involve adopting measures to
ensure a high level of consumer protection, with special provi-
sion for the most vulnerable members of society, such as social
measures to provide certain groups with energy supplies at a
fair price. Unfortunately, experience in this area has not been
positive.

4.2
‘Cross-border electricity flows in Europe have increased
modestly year on year since market opening. However, on
average, only 10 % of electricity consumed in the EU crosses
Member States' borders (14).’

is important

‘The blackout in Italy in 2003 and in the UCTE (15) in
4.3
2006 showed how costly any incident in the European-wide
transmission network can be. Therefore it
for
increase in trade to be accompanied with more co-ordinated
network operation and the building of new infrastructure,
including upgrading existing lines, building new lines and
investing in other network components, where needed. (…) The
European market is increasingly based on a regional concept.
This first developed naturally, following the physical realities of
the network. With the establishing of
the regions in the
amended congestion management guidelines and with the devel-
opment of the Electricity Regional Initiatives by ERGEG, the
regional approach has received an official status. (16)’

4.4
End-consumers have a specific interest in having a guar-
anteed energy supply. The growing role of the regions in the
field of energy should bear fruit for distribution and the devel-
opment of closer ties, especially between cross-border regions,
which should generate a significant increase in traffic and flows,
reducing the risk of congestion.

4.5
Protective measures for end-consumers should include
the right to be informed periodically on the quantity of energy
exchanged, its geographical origin and source, greenhouse gas
emissions in kWh, and Community and extra-European coop-
eration agreements. It is well known, for instance, that countries
that have decided not
to use nuclear energy buy energy
produced by nuclear power stations. This information should be
given to consumers, who might decide to change suppliers if
they do not agree on the energy mix. Currently users are
certainly in the dark when it comes to these choices.

4.6
Connections. A guaranteed universal service, continuity
of supply and definite user connection times are all existing
rights that prove difficult to uphold. Provision should be made
for a ‘last resort supplier’ to be identified, to guarantee service
provision should a supplier be unable to deliver.

Contracts. Transparency,

implementation procedures,
4.7
obligations, compensation, fairness, the absence of misleading

(13) Paragraphs 6.4.2. and 6.4.3. op. cit.
(14) Commission Communication of 15.5.2007, COM(2007) 250 final —
Report on the experience gained in the application of Regulation (EC)
No 1228/2003 “Regulation on cross-border exchanges in electricity”.
(15) “Union for the Co-ordination of Transmission of Electricity” (UCTE).
(16) 15.5.2007, COM(2007) 250 final.

or unfair clauses, and clear, straightforward dispute manage-
ment:
in theory these are all rights that every Member State
recognises and should have transposed from directives into
national legislation. The reality is very different. The Commis-
sion has included changes to Annex A in the third package,
increasing the obligations for companies, but there is a danger
that these will prove meaningless, as apart from in a few rare
cases there is no efficient system for imposing sanctions, either
at European or national level. On this subject in particular there
is a need for common rules throughout the EU, governed by a
regulation alone, as in the case of passenger rights.

Prices, tariffs, and monitoring. There is a need for
4.8
transparency,
logic, comparability, multiple payment methods,
the dissemination of smart meters, and clear and comprehen-
sible invoices relating to actual consumption. It is very impor-
tant that fuel bills give a clear breakdown of the cost of energy
production (purchase of fuel, distribution, maintenance, amorti-
sation, taxes, and personal and general duties), sources (fossil,
hydroelectric, renewable, nuclear, combined cycle), CO2 emis-
sions,
comparisons with previous
consumption and the average consumption of other users with
the same profile. An informative tool of this kind can enable
consumers to consider the need to act in order to save energy.
Bills enable suppliers to communicate with consumers (and
according to the Commission's recent proposal should be
monthly); they can also be the vehicle for a series of ‘positive
messages’ to promote European policies.

savings made,

energy

4.9
Free choice of supplier. It should be possible to change
supplier at any time of year, free of charge, without prejudice to
one's rights. There should be a guarantee that the change will be
made within a set
stipulate a
minimum duration. The EESC believes that in such cases there
should be a ceiling on the minimum duration of contracts, so as
not to undermine the right to choose a supplier by imposing
exaggeratedly long durations and large penalties.

time. Sometimes contracts

4.10
Information. Information must be truthful, complete,
and easy to understand when it comes to conditions of access
and use, charges, prices and changes thereto. Consumers must
be made aware of their rights with regard to public service
charges and the procedures according to which the universal
service is secured, in particular regarding the quality and conti-
nuity of the electricity or gas supply, compensation for failure to
uphold those rights, and free or low-cost access to dispute
settlement arrangements, so as to ensure all enjoy the same
rights. All suppliers should provide a list of all operators active
in the region annually or whenever a new supplier enters the
market. Suppliers should also inform their customers of the
financial, tax and legal measures designed to support initiatives
to improve energy efficiency and should offer practical sugges-
tions on ways to save electricity or gas.

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4.11
Complaints. In 1998, Commissioner Bonino was very
active in support of consumer rights and the Commission
issued a recommendation (17) on bodies responsible for the out-
this was then in
of-court settlement of consumer disputes;
2001 (18) incorporated within a further recommendation so as
to broaden its scope. In the context of energy consumers' rights,
attempts should be made to resolve disputes primarily in out of
court settlements, as an effective and low-cost way of offering
consumers protection promptly, providing the bodies respon-
sible are impartial and the procedure is efficient, public and
transparent. Given the scope of contentious jurisdiction in the
realm of energy supplies, it would be inappropriate to devote
time and resources to court cases.

to implement

Representation. Despite recognition in European legis-
4.12
lation,
the right of
it has proved difficult
consumer associations to representation. The absence of a Com-
munity legal framework on class actions, even in the realm of
cross-border services or economic activities, further restricts this
right to take out court injunctions. The establishment of the
European Agency might be the time to make this right a reality
and carry through the option of setting up a permanent round
table for all the stakeholders, as is the case for instance in the
application of the ‘Cars’ directive, in the transport sector, with
representatives of both sides of industry and consumers called
upon to assist Community bodies in analysing the proposals.
Similarly, a permanent round table should meanwhile be set up
in the Member States, to be consulted by national regulators.

4.13
Social measures. The Committee is very aware of the
issues involved in fuel poverty. Cutting off supplies in the case
of arrears should be outlawed. In a recent opinion, the EESC
stated that: ‘A European energy policy must be sustainable by all
social groups, so that all are treated equally as regards access to
the services provided by energy suppliers’ (19). The EESC is not
in favour of free energy supplies, as this would not encourage
good energy saving behaviour; it does argue however that the
taxation. Public
issue should be addressed through general
service contracts should provide for the provision of a reserve
of electricity and gas at cost price, in order to meet the needs of
the most vulnerable consumers, to be sold to them in sufficient
quantities at affordable prices. The principle of responsibility
should always be preserved. In any case, the definition of a
vulnerable consumer and the measures to be adopted to assist
them should be the same throughout the Union, so as not to

Brussels, 17 January 2008.

discriminate against anyone, and so as to avoid distorting
competition.

Unfair

practices.

Consumers

commercial

are
4.14
protected from misleading sales practices where false informa-
tion is provided and the relevant information necessary to make
an informed decision is omitted, creating obstacles and applying
unjustifiable costs to discourage consumers from changing
supplier. The EESC believes that consumers' rights must be
strengthened against such practices. Article 5, paragraph 5 of
Directive 2005/29/EC of 11 May 2005 refers to Annex 1 which
contains a list of those practices which shall in all circumstances
be regarded as unfair, but adds that
the list may only be
amended by revision of the directive. As the time necessary to
update the list seems inordinately long,
the regulation that
should contain measures for protecting energy consumers might
be the ideal place to include specific energy consumer rights
against unfair sales practices.

5. Exchange of good practice.

5.1
The EESC recommends that the Commission examine a
number of consumer rights charters already agreed in the
Member States between consumer organisations and energy
suppliers, in which the rights granted to customers have more
substance than those planned for
in the EU charter. For
instance, in Italy, a consumer rights charter in the area of social
responsibility has been in place for years between the ADOC, a
consumer organisation, and La220 s.p.a., an electricity market
wholesaler. It goes beyond what the Commission is suggesting.
For instance, this charter provides for respect for consumers'
time, the right to participation and representation, the right to
quality and safety, the right to the best price, the right to
compensation and a rapid and effective conciliation procedure.
There are ongoing six-monthly checks that the charter is being
properly applied; this is binding for companies as it is written
into their contracts with clients.

to regulate the continuity of

5.2
Some national regulators intervene to manage disagree-
ments, establishing a system of obligations, controls and penal-
ties
the energy distribution
service (20). In the event of sudden power surges, electricity cuts
or blackouts, there is no doubt that having failed to fulfil its
supply contract obligations the supplier must pay damages,
unless it can prove that it is not to blame for the cut (21).

The President

of the European Economic and Social Committee

Dimitris DIMITRIADIS

(17) 98/257/EC of 30 March 1998.
(18) 2001/310/EC of 4 April 2001.
(19) CESE 1243/2007 Action plan for energy efficiency, rapporteur: Mr

Iozia (unpublished).

(20) Energy and Gas Authority, Decision 202/99.
(21) Summa 188/ April 2003, Giulio Disegni p. 22.