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Consumer protection in the EU & the role of energy ombudsmen
- 1. Consumer protection in the EU & the role of energy ombudsmen Marine Cornelis Secretary General Верхoвна Рада Украї́ни, 8 December 2017 NEON, the network of independent energy ombudsmen and ADR bodies
- 3. 2009: the ‘Third Energy Package’ directives 10 consumer rights An electricity connection A choice of supplier An easy and fast switch of supplier Clear contract information and right of withdrawal Accurate information on your consumption and billing based on it Information on energy efficiency & renewable energy Specific consumer protection measures for 'vulnerable‘ consumers An energy performance certificate for your home A national contact point for energy Easy resolution of complaints and disputes with an independent body such as an energy ombudsman
- 4. Purposes of the ADR Directive (2013) to ensure all consumers within the EU can seek redress from an ADR scheme if they have experienced problems with goods and services (contractual disputes) that they have purchased, online and offline to set consistent standards for all ADR providers and quality requirements (e.g. 90 days for complaint handling) to simplify ADR and reduce consumer confusion
- 5. OMBUDSMEN
- 6. Characteristics of ombudsmen Autonomous & independent authorities Public mandate: put in place by federal, national, regional or local authorities Free of charge for the consumer
- 7. Job of Ombudsmen Consumer disputes resolution Policy & Regulation Fairness • external appeal body towards energy companies and public bodies • takes into account any current legislation and regulations • Powers of investigation and to formulate opinions and policy recommendations • Work with national authorities and regulators • No discrimination, attention to vulnerable customers • right of good administration, fight against malpractice and significant breaches of ethics • human and fundamental rights & rights of the persons
- 8. By handling consumer disputes, as external appeal bodies, ombudsmen and ADR, members of NEON, rebalance the relationship between consumers & companies
- 9. NEON
- 10. NEON = National Energy Ombudsmen Network International Association Ombudsmen, mediation, alternative dispute resolutions services Totally independent of the industry Energy sector Directives 2009/72 & 73 “Third Energy Package” Directive 2013/11 on ADR
- 11. energy consumers: protection & empowerment Promotion of Alternative dispute resolution (ADR) Representation of the members Exchanges with stakeholders on energy & consumption policies exchange of information, experience and good practices Objectives
- 13. Strong capacity building Steer the sectors Access to the European institutions and stakeholders Networking, peer exchange and expertise sharing Policy and legal expertise Events Website, newsletters, publications, social media Networking & capacity-building at EU level
- 14. FIGURES
- 15. 8 members and associate members = 219 millions citizens / 180 millions customers
- 16. Customer vs Complaint breakdown Customer breakdown United Kingdom, 52,209,923 France, 48,053,000 Belgium, 9,026,170 Italy, 58,229,374 Ireland, 2,267,854 Wallonia, 2,535,898 Catalonia, 6,640,802 Malta, 290,477 Complaint breakdown United Kingdom, 41,481 France, 12,260 Belgium, 5,526 Italy, 42,326 Ireland, 275 Wallonia, 918 Catalonia, 1,025 Malta, 24 Source: NEON 2017
- 17. Number of disputes per 100,000 customers (household & non household end-users, electricity and gas) United Kingdom France Belgium Italy Ireland Wallonia Catalonia Malta Total number of complaints per 100,000 points of delivery (households and non-household end-users) 79 26 61 73 12 36 15 8 58 0 10 20 30 40 50 60 70 80 Source: NEON 2017
- 18. Evolution of the number of complaints United Kingdom France Belgium Italy Ireland Wallonia Catalonia Malta Complaints in 2015 67,449 12,319 4,211 43,091 372 519 1,249 39 Complaints in 2016 41,481 12,260 5,526 42,326 275 918 1,025 24 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 Source: NEON 2017
- 19. 103,835 energy-related disputes in 2016 Breakdown per dispute (8 members) Connection to the grid, 3,115, 3% Metering including smart metering, 15,413, 14% Quality of the supply, 1,694, 1% Activation, Disconnection, 3,129, 3% Invoicing, e-billing problems, 37,196, 34% Price/tariff, 3,680, 3% Provider change/switching, 12,421, 11% Commercial practices, 13,033, 12% Payment problems, 4,248, 4% Customer service, redress and privacy, 6,368, 6% Other/uncategorised, 9,530, 9% Source: NEON 2017
- 20. ENERGY UNION “CLEAN ENERGY FOR ALL PACKAGE” CURRENTLY DISCUSSED AT EU LEVEL
- 21. 2018: the ‘Clean Energy for All’ Package new consumer rights Better bills & better information Free access to certified price comparison tool Easier switching processes Smart meter rollout Active consumers, self- generating communities Demand-response mechanisms, directly or via aggregators Dynamic electricity price contracts End of regulated tariffs New role for DSOs Better monitoring of vulnerable consumers
- 22. New rights for energy consumers: active consumers & prosumers Produce Store Consume Sell back to the market Enabled individuals & local energy communities
- 23. Active consumers: New Product & Service Providers Local energy communities Aggregators All relevant regulation should apply, incl. Right to an energy Ombudsman
- 24. Clean Energy Package Improvements •Better information, better bills •Certified price comparison tools •Active consumer engagement through new products and service providers without penalising not-engaged users •Extension of existing consumer protection to all third party intermediaries and cross-sectoral cooperation between regulatory agencies Shortcomings •Complete ban on price regulation & social tariffs •Limited support for energy poverty and measures •Unclear right to switch (bundled offers) and rules on switching-related fees •Unclear definitions (local energy communities) •No ‘right to energy’ nor clear reference to solidarity •Right to out-of-court dispute settlement (Ombudsman)
- 25. What is needed: better cooperation Consumers Policy makers Universities, research centres Regulators new business models Business DSOs Civil society Ombudsmen
- 26. QUESTIONS?
Notes de l'éditeur
- 1. NEON and the cooperation between ADR entities in the Energy Sector as required by article 16 of the ADR directive; 2. aggregated data and figures of the network 3. Example of work of NEON at EU level to empower energy consumers (including the most vulnerable): the “Clean energy for All” package
- NEON welcomed four new members in the past months: AEEGSI from Italy, CER from Ireland, SRM (CWaPE) from Wallonia and the Office of the Ombudsman in Malta, represented by the Commissioner for Environment and Planning, reaching the total number of members to eight: the Ombudsman Services in the UK, le Médiateur National de l’Energie in France, Service de Médiation de l’Energie/Ombudsdienst voor Energie in Belgium and the Síndic de Greuges de Catalunya in Catalonia (Spain). In terms of population, NEON, the network of ombudsmen and ADR bodies, covers almost half of the EU. However, many countries and regions have yet to join the network and/or set up independent, efficient and trustworthy out-of-court dispute settlement schemes. A part of the picture is still missing.
- Only 58 out of 100,000 customers actually have lodged a complaint to the ombudsman in NEON’s member countries and regions. According to the British energy regulator Ofgem, only 5% of complaints are brought to the energy ombudsman, suggesting that these figures underestimate consumer detriment in the energy market. This data also shows that if the European Energy Union is to empower all consumers (household and non-household alike), strong, accessible and fair ADR procedures with an empowered independent body are essential. Review of ombudsman services: energy A report for Ofgem lucerna partners July 2015 https://www.ofgem.gov.uk/sites/default/files/docs/2015/09/review_of_ombudsman_services_energy_2.pdf
- There was a drop in the number of disputes in the UK, but it does not represent the full picture: in several NEON members, the number of complaints remained stable compared to the previous year, or increased in certain cases such as in Belgium
- Despite significant differences between the Member States, data show that the invoicing process and the relationships with market actors such as suppliers or DSOs are at the core of end-users daily concerns. Relationships with companies appear to be far from being smooth, with many issues related to switching and commercial practices.
- The role of the consumer is changing from passive to active. But overall their (lack of) skills and (poor) interest remain the same! Active consumers and prosumers will be able to generate, consume, store and sell electricity back to the market. They will be able to do so thanks to new products and services providers, such as local energy communities or aggregators. We have to work together to ensure that consumers trust the process enough to engage and stay engaged, and never loose an inch of their rights as consumers.
- local energy communities: customer or group of customers acting jointly who consume, store or sell electricity generated on their premises, including through aggregators, or participate in demand response or energy efficiency schemes provided that these activities are not their primary commercial or professional activity Aggregators: legal entities effectively controlled by local shareholders or members, generally value rather than profit driven, involved in distributed generation and in performing activities of a distribution system operator, supplier or aggregator at local level, including across borders. Member States are required to provide an enabling framework for local energy communities which will ensure that participation is voluntary, members or shareholders do not lose their rights as households or active customers and that they can leave a local energy community in line with the rules on switching. We need to make sure that all relevant regulations shall apply, including on the right to out-of-court dispute resolution with the energy ombudsman. Participation of the new product & service providers to the energy ombudsman scheme should be mandatory. Many points still have to be clarified, including on the relationship with the DSOs, solidarity and enforcement of consumer rights in this scheme.
- The right to out-of-court dispute settlement with an energy Ombudsman is challenged by the current wording. This change would limit our role to simply dispute resolution as opposed to being able to provide advice to stakeholders in the market-place which would restore the balance between individual (vulnerable) consumers and the energy companies. We have to consider different types of “consumers’, including the micro businesses or SMEs willing to engage. Furthermore, energy customers may have disputes where they are not “consumers” in the sense of the ADR Directive, that is, in a contractual relationship with a trader. So, for example, there may be a dispute with a distribution company or in relation to a feed-in tariff or over an energy efficiency measure supplied via a government scheme. As aggregators and energy communities become more widespread there is scope for disputes throughout the chain of relationships, some of which may be caught by the ADR Directive, others which may not. The focus is on persons acting as “consumers” which means acting for purposes outside a person’s trade, business, craft or profession. This will exclude micro-businesses and, arguably, active consumers where it is said that the process of active consumption is not their primary professional or commercial activity. In other words, an active consumer in the energy context is engaged in a commercial activity, albeit not a primary one, and so is not a consumer for these purposes under the ADR Directive. If the number of active consumers, as well as micro-businesses, grows, this problem can only get worse. It can be solved by an Ombudsman, or ADR scheme, taking on jurisdiction for these types of energy customers, as has been done in the UK. The 9th Energy forum has acknowledged this issue and called to reinstate the ombudsman scheme as in the 3rd Energy Package, we now hope that the Parliament and Member States will follow.
- We need all stakeholders to be involved & take their responsibilities. We all have a part to play. The latest EU Commission’s Market Monitoring Report shows a very low level of performance of the energy markets, and nobody wants this level to worsen.