Cooperation between national authorities needed to fight unfair commercial practices

Unfair commercial practices are a problem in all Nordic retail markets for electricity. The fact that no single authority has a complete mandate in this area, makes action more difficult. NordREG believes that coordinated activities between various national authorities are needed, but may be difficult due to different methods, priorities and mandates.

In a report published today, NordREG describes the situation regarding unfair commercial practices in Denmark, Finland, Norway and Sweden. NordREG also compares how responsibility when monitoring compliance with legislation is split between different public bodies and gives examples of remedial actions already taken in each country.

NordREG defines unfair commercial practices as when a customer’s behavior is affected by omitted or misleading information by a seller. Unfair commercial practices may also be practices and contract terms that do not fully comply with the intentions of the national Electricity Act and general consumer protection.

Concrete examples are contract terms that are unfair or changed during the contract period, prepayment that is not refunded, customers that are switched without consent and very short introductory offers that lead into less favorable deals without customers noticing it.

Suppliers that use these methods often target vulnerable customers, for example elderly people, consumers with poor language skills or small businesses not covered by the same legislative protection as household consumers.

The NRAs (National Regulatory Authorities) are the main public bodies that deal with the retail electricity market. However, since other regulation applies, i.e., general contract law, distance selling law and consumer protection law, the NRAs have a shared jurisdiction with other government agencies, or public bodies, on some retail market issues.

This split responsibility can, from a consumer’s perspective, sometimes be seen as ineffective, confusing and unfortunate. Customers may have to contact several public bodies before they can report a complaint or get advice and help. A consequence of this may be that complaints do not reach the right authority and unfair commercial practices are not dealt with.

Here, coordinated activities between various authorities may be necessary. However, they may be difficult to impose due to the different methods, priorities and mandates in the Nordic countries. It is also important that Nordic NRAs continue to share experiences and best practice regarding unfair commercial practices, monitoring and successful remedial actions.

In the report NordREG also lists the following problematic issues, together with possible suggested actions:

  • Legislation that regulates the retail market for electricity is divided between the NRA and the consumer authority.

To counter this, coordinated activities between the NRA and the consumer authority are needed. Good communication and information flow between different authorities are essential. Sharing information and experiences between authorities can give a better understanding of complaints and lead to faster complaint resolution. Better information flow between authorities can also ensure that more unfair commercial practices are uncovered.

  • Poor legislative protection for microenterprises that to a higher extent have become the target for unfair commercial practices.

Consider legislative changes to increase the protection of microenterprises. Improvements will also come with the implementation of the Electricity Directive.

  • Problems connected to telemarketing.

Consider the need for written consent and/or an opt-in/opt-out system.

Read more: Unfair commercial practices in the Nordic retail markets for electricity

29 June 2022

NordREG informs on the national decisions to approve the Nordic TSO’s proposal regarding sharing of regional day-ahead and intraday coupling costs

The Danish Utility Regulator, Energimarknadsinspektionen and Energiavirasto, have made national decisions to approve the Nordic TSO proposal regarding sharing of regional day-ahead and intraday coupling costs under Regulation 2015/1222 for the period 1 January 2018 to 31 July 2020.

The Nordic NRAs have assessed, closely cooperated and coordinated their assessment of their proposal. The Nordic NRAs agree to approve the proposal from the Nordic TSOs that the costs will be equally divided within the Nordic region.

9 May 2022

Three Nordic countries will have data hubs in place in 2022

In February 2022 Denmark, Norway and Finland will all have data hubs in place to facilitate wholesale and retail market processes. In Sweden, the work to implement a data hub is currently put on hold with no date for restart scheduled.

Data hubs are currently up and running in Denmark and Norway and under finalisation in Finland, with a scheduled go-live date on 21 February 2022.

There is no estimated go-live date for the Swedish data hub since the necessary legislative package has been further delayed. However, according to the Swedish TSO, Svenska Kraftnät, the project will be restarted as soon as legislation is in place. Depending on when the legislation is enacted, the estimated time to complete the project is 3 to 4 years.

NordREG believes that successful implementation of data hubs and the ability to centralise handling of market processes are key factors for the Nordic retail market to work effectively.

20 December 2021

Non-compliance with ACER Decision leads to regulatory enforcement cases

NordREG notes that the Danish Utility Regulator, Finnish Energy Authority and Swedish Energy Market Inspectorate will initiate enforcement procedures against Energinet, Fingrid and Svenska kraftnät for non-compliance with an ACER Decision on the establishment of a Nordic balancing capacity market.

Background

On 5 August 2020, ACER adopted four decisions approving methodologies for the establishment of a Nordic balancing capacity market for frequency restoration reserves with automatic activation (aFRR). One of the methodologies (Annex I  to ACER Decision 22/2020) contains an obligation for the TSOs to submit an amendment to the methodology. The Decision is addressed to the CCR Nordic TSOs, i.e. Energinet, Fingrid, and Svenska kraftnät.

The CCR Nordic TSOs have submitted a proposal for regulatory approval in July 2021 as a consequence of the methodology as approved by ACER.

The Nordic NRAs have assessed the proposal and find that the proposal has no legal content. In other words, the proposal does not contain any provision that amends the methodology that ACER approved in its decision.

Therefore, the Nordic NRAs cannot see how the TSOs’ proposal can be approved. Further, it can be argued that the TSOs have not complied with the methodology as approved by ACER.

Under EU law, the CCR Nordic NRAs have the duty to ensure the compliance with ACER decisions addressed to “their TSOs”.

The CCR Nordic NRAs have considered how to ensure such compliance and will take appropriate enforcement steps vis-à-vis their respective TSOs. The aim of these enforcement steps thus is to ensure that the TSOs comply with ACER’s Decision with the shortest delay possible.

The CCR Nordic NRAs will coordinate closely when taking these enforcement steps, involving NVE-RME informally in the process as has been the case in the assessment so far of the proposal submitted by the TSOs in July 2021.

The CCR Nordic NRAs are keeping ACER updated of the enforcements steps taken.

For more information, please contact:

Thomas vom Braucke
Danish Utility Regulator
tvbr@forsyningstilsynet.dk

Jarno Lamponen
Finnish Energy Authority
Jarno.Lamponen@energiavirasto.fi

Tobias Lusth
Swedish Energy Markets Inspectorate
tobias.lusth@ei.se

Stian Henriksen
Norwegian Energy Regulatory Authority
sthe@nve.no

13 December 2021

Unfair business practices discussed at NordREG’s 4th Annual Monitoring Workshop

Unfair business practices and how to monitor price comparison tools were in focus when participants from the Nordic Energy Regulators (NRAs) met to exchange experiences on how to monitor retail markets more effectively.

The Danish, Finnish, Norwegian and Swedish NRAs, as well as the Consumer Authorities, all receive many complaints on electricity suppliers that use unfair business practices, such as giving customers misleading information, using dubious sales methods or unreasonable terms. These activities have severe consequences for both individual customers and the overall trust in the market.

At the 4th Annual Monitoring Workshop arranged by NordREG, participants from the Nordic NRAs shared experience from national monitoring cases, compared possible remedial actions and learned from each other´s experiences.

The participants also discussed challenges regarding how to monitor the independent comparison tools that Nordic NRAs operate and/or regulate (in Norway the public independent comparison tool is operated by The Consumer Council).

It is clear that the different comparison tools face similar challenges and that it is valuable to continue to share experience and ideas to be able to provide Nordic customers with high-quality comparison tools.

7 December 2021

NordREG Seminar on Wholesale and Transmission Developments on 19 November 2021

NordREG will arrange a joint seminar on wholesale and transmission developments. The seminar will be held virtually on 19 November 2021 from 09:30 – 13:00.

The purpose of the seminar is to inform market participants, by providing regulatory input and oversight, in current topics handled by NordREG.

Some of the issues considered are:

  • Nordic Flow-Based Capacity Calculation Methodology.
  • NordREG position paper on a revision of the so-called CACM Regulation.
  • Publication of aggregated bidding curves.
  • Current terms and condition under regulatory assessment in the area of system operation.
  • Reporting requirement on the establishment of a Regional Coordination Centre for the Nordic System Operation Region.

NordREG aims at having the Nordic transmission system operators as well as market participants and other stakeholders as presenters and panelists at the seminar.

Registration

The meeting will be held as online meeting. Please register your attendance to The Norwegian Energy Regulatory Authority (NVE-RME) before 18th November 2021.

We look forward to having an interesting seminar together.

Presentations from the seminar

Concluding Remarks

3 November 2021

Save the date: NordREG Seminar on Wholesale and Transmission Developments on 19 November 2021

NordREG will arrange a joint seminar on wholesale and transmission developments. The seminar will be held virtually on 19 November 2021 from 09:30 – 13:00.

The purpose of the seminar is to inform market participants, by providing regulatory input and oversight, in current topics handled by NordREG.

Some of the issues considered are:

  • Nordic Flow-Based Capacity Calculation Methodology.
  • NordREG position paper on a revision of the so-called CACM Regulation.
  • Publication of aggregated bidding curves.
  • Current terms and condition under regulatory assessment in the area of system operation.
  • Reporting requirement on the establishment of a Regional Coordination Centre for the Nordic System Operation Region.

NordREG aims at having the Nordic transmission system operators as well as market participants and other stakeholders as presenters and panelists at the seminar.

We expect to circulate and publish a draft agenda in late October and hope that you will already now save the date.

We look forward to having an interesting seminar together.

18 October 2021

NordREGs position paper on the revision of CACM

The Nordic Energy Regulators, NordREG, has published a position paper on the revision of CACM (CACM 2.0), focusing on the governance of the MCO function and NEMO competition.

NordREG believes that CACM 2.0 must ensure a clear separation between monopolistic tasks assigned to the MCO and commercial activities assigned to the NEMO, that when doing this the operational security of the MCO function should be prioritized but also keeping in mind that new regulatory measures should not exceed what is necessary to achieve the policy objectives.

NordREG also believes that CACM 2.0 should include a plan for the phasing out of monopoly NEMOs and all countries participating in the market coupling need to transit to the competitive NEMO model.

29 September 2021

NordREG informs on the decision on the establishment of the Nordic Regional Coordination Centre (RCC)

The Energy Regulators of the Nordic System Operation Region (Nordic SOR NRAs), i.e. The Danish Utility Regulator, the Swedish Energy Markets Inspectorate, the Finnish Energy Authority, and the Energy Authority of Åland, have approved a proposal to establish a Regional Coordination Centre for the Nordic Region, with the Norwegian Energy Regulatory Authority participating informally in the regulatory approval process.

The proposal for the establishment of the Nordic Regional Coordination Center (the Nordic RCC) was submitted by the Nordic SOR transmission system operators (TSOs) in Denmark, Sweden, Finland and Åland, i.e. Energinet, Svenska kraftnät, Fingrid, and Kraftnät Åland along with the Norwegian TSO Statnett pursuant to the Electricity Market Regulation (Regulation (EU) 2019/943).

The Nordic RCC shall replace the existing Regional Security Coordinator for the Nordic region (the Nordic RSC). The Nordic RSC is currently operated as a joint office between Energinet, Svenska kraftnät, Statnett and Fingrid. The Nordic RCC will be established as a Danish public limited liability company, which will be equally owned by Svenska kraftnät, Energinet, Fingrid and Statnett. Given the small impact of Kraftnät Åland and given that Kraftnät Åland will not need the same level of services from the Nordic RCC as the other Nordic TSOs, Kraftnät Åland will not own shares in the Nordic RCC but will participate in the Nordic RCC through contractual agreements with the Nordic TSOs and with the Nordic RCC.

It follows from the Electricity Market Regulation that the Nordic RCC is to enter into operation by 1 July 2022.

The proposal for the establishment of the Nordic RCC has undergone some amendments prior to its approval. Some of these amendments were needed to ensure compliance with the Electricity Regulation.

The decisions of the Danish Utility Regulator, Swedish Energy Markets Inspectorate, and the Finnish Energy Authority can be accessed here:

For more information, please contact:

Thomas vom Braucke
Danish Utility Regulator
tvbr@forsyningstilsynet.dk

Mari Salo or Jarno Lamponen
Finnish Energy Authority
Mari.Salo@energiavirasto.fi; Jarno.Lamponen@energiavirasto.fi

Johan Roupe
Swedish Energy Markets Inspectorate
johan.roupe@ei.se

Mari Holen Christensen or Helena Mellison Lindstad
Norwegian Energy Regulatory Authority
mhc@nve.no; hem@nve.no

Henrik Juslin
Energy Authority of Åland
Henrik.Juslin@regeringen.ax

15 July 2021

NordREG requests NEMOs and TSOs to shorten grace period to absolute minimum during parallel runs

In the ongoing implementation of the flow based capacity calculation methodology in CCR Nordic, focus is now shifting to the upcoming period of parallel runs, where market participants and TSOs in parallel will be able to observe the similarities and differences between the current market coupling results and the market coupling results, where flow based parameters are used.

NEMOs have previously indicated a need to apply a so called “grace period” between date of actual operation (the trading day) and publication of results from the flow based simulation facility of up to 14 days. Market participants however, have expressed their need for swift feedback of the simulation results to make the best use and facilitate necessary learning from the parallel runs. In this letter to NEMOs and TSOs, NordREG is urging all parties involved to reduce the “grace period” to an absolute minimum.

28 April 2021