Validity of regular electricity price lists following the removal of regulation
Several articles have appeared in the media in the last few days discussing the prices that electricity suppliers will soon be charging households. Some of these articles have unfortunately interpreted the Electricity Supply Act incorrectly by stating that suppliers’ regular prices will, after government regulation comes to an end on 1 March, remain at the level they were at prior to regulation. This is untrue.
The prolonged period of government regulation of household electricity prices, which has kept tariffs significantly below market prices, will come to an end on 1 March 2025. Some media outlets have concluded, after looking at suppliers’ current regular price lists, that energy bills for March, issued in April, will double as a result of the removal of the government’s electricity price regulation measures. This is incorrect.
The Electricity Supply Act (ZOEE, paragraphs 5, 6 and 7 of Article 15) provides that energy customers must be notified of any electricity price changes at least one month before they take effect. The incorrect understanding of this act has given rise to an assumption that the regular price lists that currently appear on suppliers’ websites must remain in effect after 1 March.
This is not true. The Electricity Supply Act provides for compulsory notification of household customers regarding electricity price changes only when the changes entail an increase in a customer’s electricity bill relative to the previous price list. If electricity prices fall, the act makes no provision when it comes to how the supplier communicates with the final customer, but leaves it up to the contractual arrangements between supplier and customer as set out in the published general terms and conditions of supply. We can therefore be sure that, as per the Electricity Supply Act, the prices charged from 1 March cannot be higher than the prices currently being charged under suppliers’ regular price lists – indeed, they may be lower. Electricity price lists will therefore not necessarily be the same from 1 March as they are today. Given the drop in market prices on electricity supply markets since the formulation of the current regular price lists, we expect suppliers to be able to correspondingly reduce their regular prices in the period following the removal of regulation – that is, prices will not remain at the level set out in the current regular price lists, which apply to the period prior to price regulation.
