Bills are coming, early withdrawal penalties: here’s the time they kick in

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Key points

  • Scope of use
  • Consumers on a war footing
  • Obligations of the supplier

The free energy market may not be so free. From January 1, the new chopper for domestic customers and small companies takes the form of a fine for early withdrawal. Translated: if you want to change supplier in the electricity market before the end of the contract, you risk paying additional costs.

Scope of use

Power companies’ power to apply these charges will only apply to contracts with a fixed duration, usually 12 or 24 months, and at a fixed price. However, sanctions can also be found in permanent contracts if they represent a fixed price for a given period, limited to that period. The new rules are defined in the Arera resolution of June 6, which follows the so-called “EU Electricity Directive” of 2019, already introduced by our parliament in 2021.

Consumers on a war footing

The danger for consumers, which is part of the delicate transition period from the protected market to the free one, with the end of protection set for January 10 for gas and July 1 for electricity. The reactions of consumer associations were vehement. Consumerism defines the sanctions as “absurd” and points the finger at “binding conditions” in the face of the “much vaunted free market”. A measure “for the benefit of operators who no longer want to take the market risk which is now completely transferred to the final consumer”. Codacons announces an appeal to the Regional Administrative Court of Lazio against Arero’s resolution, defining the accusations as “illegitimate” and envisaging “a class action on behalf of all wrongfully injured users”. Assouenti is asking for intervention from the antitrust authority and Mr. Prezzi, explaining that the sanctions “might have made sense before the energy crisis, when there was no instability and rate spikes,” but “in the current situation, they distort competition by preventing consumers from switching to better offers ยป. The National Consumer Union accuses the Italian Parliament of “wanting to be on the side of the energy companies and not on the side of families, despite free competition that ensures perfect consumer mobility”.

Obligations of the supplier

However, according to Arera, suppliers will have various obligations to meet, such as “clearly” stating the maximum amount of any fee, which must be “specifically approved and signed by the customer”. It is not yet clear how high the penalty could be, but the authority specifies that “the requested amount must in any case be reasonable and must not exceed the economic loss resulting from the early withdrawal.” It is up to the seller to prove the existence and extent of the loss.

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