Return of ‘normal’ energy contracts expected in spring

• Rob Coster

  Economics reporter

Lower purchase prices for gas and electricity and new rules for terminating energy contracts are good news for households. Not only are the costs for variable energy contracts falling, there is also room for long-term contracts with fixed prices.

The market for energy contracts for households therefore seems to be entering calmer waters this spring. Long-term contracts can be offered again from April, it is expected.

Nevertheless, the large energy companies are not yet making any concrete promises about the type of contracts and the rates that go with them, according to a tour of the three large energy companies. They do promise that there will be permanent contracts again, but the moment and the details of this are still being considered.

The conditions for a permanent energy contract are becoming stricter. The energy company must guarantee the price and the consumer must actually complete the contract or pay a higher fine.

The Netherlands Authority for Consumers and Markets (ACM) has drawn up new rules for this that are similar to those for mortgages. You can cancel a permanent contract, but the energy company will then charge the costs of the loss it suffers.

Now you can often get out of a permanent contract for about 50 euros per product (gas and electricity). The new rules should prevent all customers from switching to a cheaper contract in the event of sudden price drops. The energy company will then be left with expensively purchased energy and could even collapse.

The purchase price of electricity is now falling sharply:

Energy companies are under great pressure from the government to offer permanent contracts again. Minister Jetten for Climate and Energy is preparing legislation that will force companies to offer permanent contracts of at least one year. This is important because the cabinet wants to stop subsidizing energy bills via the price cap at the end of this year.

Minister Kaag of Finance has indicated several times that the price ceiling will not be extended after this year, even though the energy crisis will probably not be over by then.

The purchase price of gas has also fallen sharply:

Gasunie and most energy experts assume that the uncertainty about the supply of gas will last for several winters. The current fall in prices on the gas market therefore offers no guarantee for the future. Without help from the government, therefore, only a long-term contract gives households some certainty about their energy bill.

There is distrust about the high rates charged by energy companies in the Netherlands. When it became clear that there would be a price ceiling, the purchase prices of gas and electricity already fell sharply. Nevertheless, the variable rates rose again sharply on 1 January.

The regulator ACM is currently investigating this. If the companies do not have a good explanation, the regulator can ask to adjust their rates. Energy companies point out that they previously purchased the energy that is now supplied at much higher prices.

Out research on behalf of Energiebeheer Nederland, it turned out yesterday that 57 percent of the Dutch people now believe that the energy supply should be fully in the hands of the government.

The free energy market can no longer be taken for granted politically either. At the request of the House of Representatives, Minister Jetten is having an analysis of market forces carried out, which is expected before the summer.

Meanwhile, price comparators in the Netherlands are optimistic: they expect that there will be something to choose from again this spring for consumers. This morning it also appeared that for the first time an energy company is again using rates that stay below the price ceiling.

It is to be expected that other energy companies will follow this example. It would mean that the price of gas and electricity will also fall for households for the first time in a long time.

Because there is probably something to choose from again, energy companies do not want to make the competition any wiser about the types of contracts they will offer and the associated rates.