Regulator fears energy companies’ claims: ‘Policy should set reasonable profits’

The regulator at the Dutch Consumers and Markets Authority (ACM) expects demand from energy companies unless legislation regulates how much profit they can make below the price ceiling. ACM President Martijn Snoep agrees that the House of Representatives should determine what constitutes a reasonable profit for energy companies and implement it. news time.

At today’s hearing, many lawmakers reacted with surprise to the announcement that the energy market regulator was unable to determine what the normal fee is for energy suppliers.

ACM fears energy companies will challenge the regulator’s price ceilings in court. “This means that the decisions we make must be well protected by law,” Snoep says. He calls out to politicians: “Give us a clear legal framework, then we’ll implement it.”

chaos

Failure to do so may result in court rulings on maximum profits or cancellation of returns below the price ceiling. “Then energy companies can claim compensation from the government and therefore from the taxpayer,” Snoep says. He fears “chaos” if the laws are not clear enough.

Climate and Energy Minister Rob Jetten had asked ACM to determine what a “reasonable” margin would be for energy companies, as the government wants the ceiling price to go into effect on January 1. Consumers then pay a fixed maximum price for gas and electricity. The government compensates energy companies for the difference between this maximum price and the price they will actually charge.

But ACM says it cannot determine what such a reasonable margin is. “This requires the judgment of politicians,” says ACM chief Snoep. “Only they can determine what is appropriate.” Snoep says that once this becomes law, the ACM can enforce it.

Outside

The regulator points out that energy companies are subject to a so-called “light control regime”. “This means we don’t know everything about utilities,” Snoep says. “We can ask them for information if there’s a reason, but we don’t constantly watch their books.”

The Business and Climate Department previously said it was “surprised” that ACM said it was unable to set a margin. Minister Jetten is therefore asking an independent foreign party to determine a suitable profit for energy companies. Jetten is seeking to fully compensate the energy companies for their loss of sales in January and February so that the upper price cap comes into effect on January 1st. Starting March 1, a fee based on your purchase price plus a margin to be determined will be the starting point.

A spokesman for Minister Jetten is unwilling to comment on the possibility of energy companies making requests. “I don’t want to speculate about it,” he says.