Executive summary
According to Article 28a of the revised EU Electricity Market Directive, Member States shall ensure that vulnerable and energy-poor customers are fully protected from electricity disconnections by either prohibiting suppliers to disconnect their customers or by using equivalent actions.
While we acknowledge that those households need dedicated support and solutions for their situation, prohibiting disconnections is not a constructive measure to tackle nor solve the root cause. Instead, consumer protection frameworks across the EU offer alternative supporting measures to effectively address the issue. We advise Member States against introducing bans mainly for three reasons.
First, disconnections from the grid are a last resort measure and suppliers are not interested in disconnecting their customers. Beyond that exceptions to disconnection rules may apply to certified medical hardship cases under social welfare frameworks. Second, national consumer protection frameworks rightfully require suppliers to adhere to strict disconnection and dunning procedures before a disconnection takes place. 23 Member States have such procedures in place according to ACER and CEER’s 2023 Market Monitoring Report. Plus, a plethora of other supporting measures and safeguards already exist in Member States to support consumers in settling their bills and finding solutions for their situation, effectively preventing disconnections. Third, a ban bears the risk of moral hazard and disincentivises consumers to engage with suppliers.
We suggest the following substitutional and equivalent measures to disconnection bans that are more appropriate for preventing disconnections, requiring the involvement of national legislators and regulators in cooperation with supplier and consumer organisations:
- develop national consumer-supplier engagement codes to increase mutual engagement so solutions can be offered for customers;
- review and potentially extend the set of national supporting measures and safeguards, i.e. energy efficiency measures;
- consider the option of reduction of power supply to a vital minimum to nudge non-engaging customers – if technically feasible and the climatic conditions in Member States allow it;
- tackle energy-poverty first and foremost through social policies; and
- for Member States applying a definition for energy poverty and vulnerability: apply reasonable criteria for a justified scope.
Therefore, regarding Art. 28a, instead of prohibiting disconnections, we ask Member States to acknowledge all existing and newly defined supporting measures and safeguards as equivalent actions.