Energy consumer protection at the time of Coronavirus: a case study

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The COVID-19 outbreak makes us face an unprecedented situation. Our consumption and social model needs to be reinvented. Governments seem to have decided not to add to the health crisis a social catastrophe that would leave too many people out in the cold. In this paper, I explore the first support measures for energy consumers set up in five countries: Italy, France, Belgium, Spain and the United Kingdom. 

The COVID-19 outbreak makes us face an unprecedented situation. Our consumption and social model needs to be reinvented. It seems that governments have decided not to add to the health crisis a social catastrophe that would leave too many people out in the cold. In this paper, I explore the first support measures set up for energy consumers in nine countries: Italy, France, Belgium, Spain, Portugal, Romania, Ireland, Austria and the United Kingdom.

NB: This article does not pretend to be comprehensive: there are still too many uncertainties, in particular, about the duration of the confinement and future policy priorities. But if you are interested in a follow-up and a more complete study, please contact me. I would be delighted to conduct it.

Please also reach out if you see any missing information or support measures, I will try to update this document regularly, but there are probably some elements I will overlook.

Initial publication: 31 March 2020
Last update: 20 May 2020

Staying home

Energy is a fundamental need, which appears all the more primordial as it is the one tool enabling us to hold on to the rest of the world in this period. It is thanks to energy that we can cook and conserve food; it is thanks to electricity that we can charge our telephones and keep in touch with our loved ones, but also connect to the internet and try to work and study as normally as possible or enjoy video-on-demand services. But above all, electrical devices allow the people in intensive care to be treated and the medical staff to do their work.

#StayingHome also reminds us of the importance of quality housing. Our home is our shelter, our workplace, our school, our dining hall, our gym, our theatre. For many, this intense cohabitation is only a temporary adjustment, perhaps uncomfortable but still manageable. For others, including the 156 million European at risk of poverty and poorly housed and 50 million facing energy poverty, the COVID-19 outbreak will only aggravate their difficult circumstances. Without internet access and the necessary privacy to study remotely, many children are at risk of dropping out of school. Social workers can no longer make home visits. The social divide is all the more visible when considering homelessness, which, as a result of social distancing and the closure of beds in shelters, leaves even more people sleeping in deserted streets. Economic, social, physical, and psychological vulnerabilities will only be exacerbated during this outbreak.

Energy consumers

Sustainable energy costs are fundamental. Many families are facing new habits and unprecedented consumption, which put their already strained budget due to the economic slowdown more at risk. Measures to support household budgets have therefore been widely agreed in the EU Member States. But as regards purely energy issues, we will see that the answers are very different. The only constant is a temporary postponement of disconnection in the event of non-payment. This is one of the only measures explicitly recognised in European law to fight against energy poverty and vulnerability in critical times (article 28 of Directive (EU) 2019/944).

Austria (updated)

The representatives of the energy industry and the responsible Federal Ministry (BMK) have agreed that households and small businesses will not be disconnected in case of  delays or non-payment. The Regulator indicates that those measures will apply until the 1st of July, 2020.

Belgium (updated)

In Wallonia, from 18 March and until the end of the containment period, no more disconnection or installation of prepaid meters is possible, except for safety reasons. Specific measures are planned so that customers equipped with a prepaid meter avoid going out to recharge it and to prevent an outage or self-disconnection.

In Brussels, where there is no prepaid meter, Brugel, the regulator, proposes to extend the winter truce to 30 April to avoid energy disconnection in vulnerable households temporarily supplied by the DSO.

In Flanders, one month’s utility bill (energy or water, up to EUR 202,68) will be covered by the Flemish government for households where at least one member is temporarily unemployed because of the coronavirus outbreak. For households equipped with prepaid meters, the local centres for public welfare remain open by appointment. This enables vulnerable people to be protected against energy disconnection.

France (updated)

In France, the winter truce of rental evictions and energy disconnections has been extended until the 10th of July. It usually ends at the end of March.

Unfortunately, because it is sent by post (and the household has to send it back to the supplier!), 5.5 million households facing energy poverty will have to wait longer to receive the dedicated benefit chèque énergie, a voucher aimed at helping cover the energy expenditures. However, some households (800,000 according to the Ministry of Ecological and Solidarity Transition) chose to transmit their chèque to their supplier from mid-April automatically. The amount will be deducted directly from their bills, without any additional procedure. This should enable them to avoid potentially stressful administrative procedures and delays. 

On the other hand, very small companies (less than ten employees) in economic and financial difficulty because of the coronavirus outbreak are relatively well protected. Their energy bills are suspended for the duration of the health emergency, and their suppliers cannot suspend supplies during this period. No information has been specified to date (31 March) for the self-employed.

Italy (updated)

The regulator ARERA is one the first to have put on hold the procedures for the suspension of energy supply in the event of unpaid bills (until 17 May). In the first eleven towns most affected by the pandemic, the payment of water and energy bills will be postponed until after April 30, and their amount spread over the next monthly payments.

The period for claiming the bonus for electricity, gas, and water (households meeting economic and/or health criteria) has been extended until 31 July. ARERA decided on 28 April that vulnerable consumers whose bonus is due to expire between 1 March and 31 May 2020, can renew the application beyond the original due date (until 31 July 2020). Once the application has been accepted, following normal verifications, the “discount” will be guaranteed continuously and retroactively from the original expiry date. In general, the renewal has the usual total duration of 12 months. From 2021, the bonus will be granted automatically for vulnerable consumers.

Besides, EUR 1.5 billion are made available for the Cassa per servizi energetici e ambientali (Energy and Environmental Services Fund) to ensure the sustainability of current and future regulatory interventions in favour of consumers and users.

Last but not least, ARERA notes that due to the contraction of demand and decreased wholesale prices, household consumers on the mercato di tutela (regulated prices) will be saving, on average, EUR 184/year compared to the same period last year.

Specific provisions have been introduced since 2 April concerning the instalment payment of outstanding amounts for operators of regulated and PLACET tariffs and Integrated Water Service managers. With regard to late payments, suppliers must indicate in the first reminding letter or in the formal notice that the customer may pay the corresponding amounts in instalments without interest, according to the rules laid down by the regulator.

Suppliers can now also send invoices in electronic format (email or telephone) when customers had not yet requested it, in order to avoid postal delays. Suppliers should then recall that payments can be made by automatic means (direct debit or credit card) and that they can request to receive the invoice in electronic form instead of on paper. The electronic format entitles (electricity and gas) to a discount by choosing to combine both possibilities. Interested operators will still have to provide final customers with an address to verify the veracity of the information provided.

In order to protect operators from liquidity problems arising from the accumulation of overdue bills, the regulator has also decided on emergency measures. The ARERA has provided for specific exemptions in the context of electricity and gas distribution transmission contracts, exemptions from the rules governing the management of the related guarantees and guidance on the payment of general system charges.

Ireland (updated)

In Ireland, the regulator has issued a moratorium on disconnections of domestic consumers due to non-payment. No disconnection should happen until 19 April 2020, and the regulator reserves the right to extend the duration.  

Consumers with payment difficulties are encouraged to contact their suppliers to establish payment plans. 

For households equipped with prepaid meters, there are two different scenarios:

  • For prepaid electricity meters, the usual procedure applies, so that households can activate an emergency credit of €10 to be taken from their next top-up. 
  • For prepaid gas meters, the emergency credit has been extended from €10 to €100. 

The difference between the two procedures is explained by the fact that prepaid gas meters can only be topped up by going to specific shops, which may be inaccessible during this period. On the other hand, prepaid electricity meters can be recharged online, by telephone or at the post office, giving consumers more options. 

Portugal (updated)

Because they are considered essential public services, the supply of electricity, natural gas and liquefied petroleum gas (LPG) can only be interrupted after adequate notice, except in cases of force majeure. The regulator has extended the information period preceding the interruption of supply by a further 30 days. Under normal circumstances, the suspension of supply due to non-payment must be announced in writing at least 20 days in advance. For economically vulnerable customers, the deadline is usually 15 working days. 

Consumers who would have difficulties paying their utility bills during this period and would accumulate debts can request payment plans free of charge from their supplier. 

Distribution network operators, suppliers of last resort and suppliers must avoid actions involving home visits and must reinforce remote communication, e.g. for the communication of readings, the clarification of doubts or the establishment of payment plans. Therefore, to keep track of their consumption, users must provide their supplier(s) with their meter readings so as to avoid estimates. 

Romania (updated)

The government has decided to pause the increase in energy prices  (electricity, heat, gas, water and fuel) for the 30 days of the declared state of emergency.

Spain (updated)

In Spain, people who have lost their jobs or sources of income due to the coronavirus will be able to postpone the payment of their mortgage and energy bills.

The duration of the social bonus is automatically extended until 15 September to all beneficiaries who had to apply for its renewal by then.

Self-employed workers who have had to cease their activity or have had their invoicing reduced by more than 75% compared to the average invoicing of the previous six months, below a certain income threshold, are now eligible for the social tariff for electricity. These customers can opt for an accelerated and simplified allocation procedure.

Price regulation measures are also included for LPG and natural gas. Any increase in the energy component of the default gas tariff during the emergency period is suspended.

Update of 1st April 2020: The suspension of the disconnection of energy supply is extended to all households during the crisis period (in their habitual residence).  Initially, the disconnection moratorium was only intended for vulnerable consumers and those at risk of social exclusion (and recognised as such).

Besides, the government has introduced a suspension of the counting of the months limit for the payment of debts to energy companies.

United Kingdom

The United Kingdom plans to completely suspend the disconnection of credit (prepaid) meters for households equipped with them. Households in financial difficulty have to contact their supplier to be assisted directly. Suppliers must, in particular, help their customers with bill payments (which may be postponed or reduced if necessary) and renegotiate payment plans. The regulator Ofgem also calls on vulnerable households to register on their provider’s Priority Access Register to benefit from legal support and guarantees to deal with this situation.

The European Green Deal framework had clearly identified some of the emergencies, including the need to renovate housing on a massive scale and to leave no one behind. This crisis, its management, and response give all the more reason to commit to a fairer and more sustainable ecological transition that put human health and development at the centre.

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