Energy market still unreliable

Many years after the start of the free market, families who have chosen to exit the protected electricity and gas market have largely found themselves paying for the more expensive energy. In fact, the vast majority of users who have moved from the protected to the free market pay a higher salary bill, and those who have managed to make advantageous contracts have sprouted savings of only a few tens of euros per year. So we can welcome the Government’s decision to move the end of the protected market to December 31, 2021, whose tariffs are set by the Guarantor for ARERA energy. Therefore, until at least that date, there is no obligation for consumers to make a contract with operators who sell energy on the free market.

The inadequacy of the energy market in Italy, in relation to consumer citizens, also clearly emerges from the recent study carried out by the IRCAF (Institute for Consumption, Environment, Training).

For example in the electricity sector, for Milan users (the situation does not change much for the rest of Italy), only 1/3 (167) of the 504 sales companies publish their offers on the ARERA portal, despite the fact that it is expected the obligation, for all companies operating in the free energy market, to upload these offers on the portal. But the even more significant figure is that of the 1108 offers for the electricity – in the various segments and types of the domestic – only 57 (equal to 5.14%) are economically more advantageous than the tariffs of the “greater protection” service, while all the others (1051) are more expensive.

On the gas side, things do not improve much, again for domestic users residing in Milan, compared to 580 companies authorized to sell, here too, only 30% of sellers published their offers on the ARERA public portal, not allowing consumers to be able to fully compare the different offers. In this context, a total of 597 offers were registered for consumption of 1,400 cubic meters. In this case too, the best offers on the free market compared to the “higher protection” market are contained at 11.39% equal to 68 offers, therefore the remaining 512 offers are more expensive.

If you analyze the savings or the greater annual expenditure of the electricity bill, always taking the typical profile of a domestic user residing in Milan for a consumption of 2700 kWh per year, the maximum savings recorded for the first 10 operators on the national market is 30 euros. per year. Vice versa, the highest costs compared to the protected market are 87 euros per year.

For GAS offers, always of the top ten operators, on a consumption profile of 1400 cubic meters per year for domestic use, there is a maximum annual saving of 48 euros compared to the market of greater protection. The most expensive offers, on the other hand, are a good 132 euros more per year.

Taking into account that the most advantageous offers, for the vast majority of cases, can only be found on the web and considering that according to Arera’s 2018 report on the retail market (domestic and small businesses), only 3.4% of electricity customers and 2.6% of gas customers use the web for a new contract, it can be observed that only a small minority of consumers still have the opportunity or the will to operate via the internet to conclude a profitable contract in the energy sector.

It must also be considered that an aspect that is still unclear is not the initial offers but the prices that are applied at the conclusion of the first contact, on average after two years, in fact the contractual renewal for the consumer is practically always worse than the initial contract.

In short, in the current situation it is better to still remain in the protected market and to advise users who have chosen the free market to operate dynamically on the web to conclude good contracts.

Consumers could gain tangible benefits as users of the free market in the energy sector if at least the following actions were implemented:

  • Allow the conclusion of contracts only in the commercial offices of operators and via the web, excluding telemarketing or door-to-door sales.

  • Have universal comparators (of all operators) with offers, simplified and possibly referring to the cost per kWh for electricity and per square meter for gas.

  • Obligate the separation in the bill of any additional services.

  • Provide, even after the possible end of the “protected market”, a “administered” reference price inferred perhaps from public auction systems.

  • At the end of each contractual period, in the event of unsatisfactory proposals for the consumer, provide automatic or simplified systems for returning to the previous contractual conditions: greater protection or “administered” reference prices.

  • To drastically reduce the forest of energy sellers, arranging more stringent rules and obligations of transparency, competence and reliability both for access and for the sale of operators.

If the liberalization of the energy market is carried out to achieve better efficiency and transparency between supply and demand, by eliminating the information asymmetries between sellers and consumers, the interest of the citizen can truly be guaranteed. Conversely, if the liberalization of the market is considered as a division for speculative purposes of the cake deriving from the exploitation of almost 30 million users, then it is better to keep the old market protected.

E. B. Diacons

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