Are the eight key properties and their associated metrics relevant and sufficient for assessing the functioning of retail energy markets? (if not, please share your suggestions for other properties)
- The Handbook should stress that if a particular metric suggests that a problem may exist, NRAs should research the issue to understand what may be causing those results.
- The handbook should also indicate that, if the purpose is to determine whether price intervention is justified, a low level of concentration is sufficient by itself to conclude that price intervention is not justified.
- The handbook should also indicate that, if the purpose is to determine whether price intervention is justified, evidence of low or non-existent entry barriers (in particular, evidence of actual entry) is sufficient by itself to conclude that price intervention is not justified.
2. Are there any additional metrics that should be included?
- A new metric should be included in Key Property II to show the evolution in the number of new retailers over, at least, the previous 10 years. The handbook should explain that evidence of actual entry by retailers may be sufficient to conclude that entry barriers are low or non-existent.
- A new metric should be included in Key Property II to indicate whether regulated prices are set above, equal, or below the cost of competitive retailers (including the allowance to cover for retailing costs -fixed and all operating costs incurred by regulated suppliers).
- Metric 4, which refers to the percentage of consumers with regulated energy prices, should be moved to Key Property VIII, relating to “Appropriate protection”.
3. Are the explanations and definitions of the metrics clear and comprehensive? If not, which sections need further clarification?
All market shares and concentration indicators should be defined in terms of volume of energy (not on the basis of the number of supply points) and by reference to the relevant product and geographic markets, in line with the approach laid down in the 2024 Commission Notice on the definition of the relevant market for the purposes of Union competition law (C/2024/1645). Relevant market should not consider sales to consumers whose prices are regulated below costs or if they are considered, they should be grouped under a separate entity.
- The handbook should not include any references which may prejudge the outcome of the analysis of the relevant product market. If it does include any references to “segments”, the handbook should also indicate that the conclusion of the analysis may also be that the relevant product market is the entire retail market, for example, if retailers commonly operate in two or more market segments.
- The handbook should not include any references which may prejudge the outcome of the analysis of the relevant geographic market. If it does include any references to “national” or “regional” market definitions, the handbook should also indicate that the outcome of the conclusion may also be that the relevant geographic market may be supranational; for example, when two MSs share a common wholesale electricity market, interconnections within that common market are rarely congested and retailers from one MS are automatically allowed to operate in the other MS.
- If the handbook includes references to the “concentration ratios”, it should provide guidance of how to interpret the results from the various indicators (CR3, CR4, CR8, etc). If CEER is unable to indicate how to assess the CR results, then, those results are useless to assess the functioning of the retail market and they should not be considered or included in the handbook.
- If the handbook requires that the “number of suppliers” be reported, it should provide guidance of how to assess whether the number of suppliers is consistent with a well-functioning retail market. If CEER is unable to indicate how to assess the results regarding the number of suppliers, then those results are useless to assess the functioning of the retail market, and they should not be considered or included in the handbook.
- The description of the different types of unbundling requirements in metric 3 should be redrafted. First, it should be made clear that the four unbundling concepts are alternatives to each other. Second, they should be put in an order of “increasing unbundling intensity”: 1. Accounting unbundling 2. Functional unbundling 3. Legal Unbundling 4. Full ownership unbundling It should be made clear that the more intense unbundling concepts include the less intense ones.
- In the description to metric 6, the Electricity Directive from 2019 is wrongly cited. It must say: “Electricity Directive 2019/944” (not 994)