Brussels to target EU energy sector in consumer probe

Business Materials 2 February 2009 17:34 (UTC +04:00)

The European Commission is to launch a probe of the European Union's energy markets amid widespread discontent among consumers, who fear that they are being ripped off by their electricity and gas providers, officials in Brussels said Monday.

The move comes as the EU's Brussels-based executive is struggling to open up the bloc's national energy markets to more competition in the face of fierce resistance from former monopolies, reported dpa.

According to an EU-wide survey carried out by the commission in 2008, 58 per cent of consumers are happy with their energy providers, one of the lowest satisfaction ratings for any service provider.

But crucially, just 8 per cent of electricity customers and 7 per cent of gas customers turned their dissatisfaction into action by changing suppliers in the last two years, the lowest rate for any service in Europe.

It is therefore vital to find out why consumers do not switch more easily, so that the EU can then try to make it easier, EU Consumer- Affairs Commissioner Meglena Kuneva said.

"One person switching imposes a discipline in the market that benefits all consumers," she said.

Concerns also linger over energy companies' advertising, contract terms and billing, with consumers reporting unpleasant surprises such as sudden price rises or unexpected charges in their bills.

The EU has long been at odds with former energy monopolies in member states such as France and Italy over commission plans to boost competition, increase security and lower prices in the sector.

This is the first time that the Brussels-based body has targeted energy providers in the name of consumers.

The immediate result of the probe is set to be an official report, due for publication in the second half of the year and drawn up by the commission's consumer-affairs and energy departments.

A similar probe into mobile-phone roaming charges ended in 2007 with the EU ordering operators to slash the cost of calls made by mobile users outside their own country. dpa bn sc