More energy sold on the exchange, cautious privatisation processes and more effective consumer protection are the main proposals of UOKiK. In today’s report, presented on the International Consumer Day, the Office assesses the condition of the energy market in Poland

UOKiK has been monitoring the energy market for several years which results in conducting proceedings concerning both violation of competition (mainly abusing of a dominant position) and the collective consumer interests. Since 2003 the Office has issued 27 decisions stating infringement of antitrust law and 13 regarding practices harmful to the interests of weaker market participants, as well as 11 pending proceedings. The proceedings carried out by the President of UOKiK clearly demonstrate that energy companies do not make consumers’ lives easier. The irregularities investigated currently by the Office concern, inter allia, failure to provide recepients of the energy services with relevant information concerning significant terms and conditions for rendering services at the pre-agreement stage – proceedings against RWE Polska. Furthermore, UOKiK emamines the activity of undertakings such as Enion Operator and Energia Operator, verifying if they do not abuse their dominant market position by imposing on contractors onerous agreement terms and conditions.

Recently, UOKiK imposed on EnergiaPro, abusing its dominant position, a financial penalty amounting to PLN 250,000. One of the undertaking’s contractors reported on the activities of this company, enjoying a dominant position on the energy market of supply and sales in the region of Lower Silesia and Opole. In the course of antitrust proceedings conducted since September 2009, the President of UOKiK determined that EnergiaPro forced its consumers, both households and undertakings, to incur additional costs connected with signing the notary deed – on average over PLN 520. Thus, the entity could easily use the areas where the power grid ran, i.a. for the purpose of its maintenance and repairs. Pursuant to the law, the payments should be borne by the undertaking itself, never transferred onto others. The company ceased its practice in the course of the proceedings. Additionally, it undertook commitments to reimburse any costs borne by its customers if they file a relevant written request.

Development of competition and consumer protection on the energy market are the subject of the latest Report of UOKiK – Directions of Development of Competition and Consumer Protection in the Polish Energy Sector. The structure of the energy market in Poland is the priority for the development of competition on this market. According to the Office, further consolidation of the largest entities in this sector would be disadvantageous. It would negatively influence the energy market, both at the wholesale and retail level. Additionally, it could contribute to unjustified increase in prices affecting final users, including consumers. Positive results for the development of competition might be ensured by privatisation of selected undertakings, if carried out reasonably and armed with the best scenarios for the market.

UOKiK underlines that a significant drawback of the present structure is the lack of liquidity on the wholesale market and existing market access barriers of all stakeholders to the energy. On 11th March 2010 an amendment to the energy law came into force, which i.a. imposes on energy undertakings the obligation to sell a minimum of 15 per cent of their generated energy on the commodities exchange. Currently, the Polish Power Exchange sells 3 per cent of energy. The Office believes it should improve the situation.

Moreover, enhancing the price competition between undertakings shall certainly encourage recipients to change their energy provider. Since 2004 all undertakings have been enjoying this option, and since 2007 it has been available also to consumers. So far, only 1,035 individuals have taken advantage of it. Moreover, 89 per cent of Polish customers indicated they do not know how to change their energy provider. The latest amendment to the energy law, which simplified the procedures of changing the provider, is not sufficient according to the Office. Further changes increasing consumer mobility should include activities enhancing the knowledge of consumers’ rights and enabling consumers to compare market offers. The latter is possible, among others, owing to reliable calculators for comparing prices introduced by energy providers operating within the area of particular operators of distribution systems.

The information collected by UOKiK cleary demonstrates that consumers still find it difficult to understand the energy bills. Many fees indicated on the bill are invariable regardless of the amount of energy used and simulteneously unclear e.g. for transmission, for time of day, for distribution or fee zones. The Office proposes to simplify the bills by decreasing the number of invariable fees and transferring some of them to variable ones. This will improve the clarity of offers and consumers’ willingness to save money. Similarly, it seems necessary to regulate the issue of complaints. For instance, a principle applicable in other fields of life shall be adopted – if a complaint is not considered within the specified time limit, it is deemed to be sustained. At present, the power plant is the privileged party and the aggrieved consumers encounter obstacles when pursuing their claims.

Today consumer rights should be particularly considered. Since 1983, 15th March has been celebrated as the National Consumer Day. In 1962, on this day John F. Kennedy, president of the USA, formulated four main rights of consumers (right to information, choice, safety and representation). It should also be noted that in Poland consumers in dispute with undertakings are provided with support of consumer ombudsmen. Additionally, the Association of Polish Consumers renders free of charge counselling under telephone number 0 800 800 800. Consumer advisory services in Poland are financed, inter alia, from UOKiK’s budget. Moreover, at the Energy Regulatory Office operates the Spokesman for Fuel and Energy Consumers who provides support for consumers in litigation with energy undertakings in cases of disputes pertaining to failure to perform, or improper performance of the agreement.

Additional information the media:
Małgorzata Cieloch, Spokesperson for UOKiK
Department of International Relations and Communication
Pl. Powstańców Warszawy 1, 00-950 Warsaw, Poland
Phone: (+48 22) 827 28 92, 55 60 106, 55 60 430
faks (+48 22) 826 11 86
E-mail: [SCODE]bWFsZ29yemF0YS5jaWVsb2NoQHVva2lrLmdvdi5wbA==[ECODE]

Sources used in the article: research by the Energy Regulatory Office; research by PBS DGA for On Board PR