„Open
markets with well-functioning competition cannot in the long-term coexist with regulated
end-user energy prices,“ the European Commission (EC) assessed in 2010 in its staff working paper.
Based on position
of European regulator´s group ERGEG, as predecessor of current ACER agency,
the EC agrees that price regulation can act as a barrier for access of
higher number of suppliers, i.e. bigger competition, and therefore should be “transitional”.
Slovak
Regulatory Office for Network Industries (URSO) and a member of
ERGEG/ACER in its 2011 annual report claims that the electricity and gas market
in Slovakia was „truly functional“. Yet there is no sign of temporary character
of price regulation in the draft of Act on regulation in network industries.
URSO annual
report even says that 2012 represents „a new milestone in the market liberalization
process“ due to deregulation of energy prices for small-sized companies.
Nevertheless,
the draft of new Act includes a proposal for re-introduction of the
end-price regulation for SME´s.
The regulator
advocates necessity of end-user price regulation as a tool of consumer
protection against excessive prices otherwise demanded by suppliers. Also the
European Commission agrees that “protecting vulnerable customers will remain necessary
in competitive markets, but not necessarily in the form of regulated prices“. According
to the EC tools „must work in line with and support the pre-requisites of open,
competitive markets“.
Traditional
as well as alternative suppliers believe there is no need for further price regulation
in Slovakia. If it remains it should only apply to well defined group of
customers, not for the whole segments of market.
„In many
countries, the co-existence of regulated and market prices is clearly not a
transitory measure,“ ERGEG said already in 2007. Together with the EC they recommended
EU member states which still had regulated prices to publish a roadmap containing specified steps how to remove the
need for continued end-user price regulation.
Court of
Justice of the EU confirmed in 2010 that state determination of the price level
is allowed for a period that is necessarily limited in time (Case C-265/08).
However,
the proposed draft of Act assumes that price caps determined by URSO will be
valid for couple of years and not even for one year as today.
There are
some indicators how to measure the liberalization and maturity of competition in
open market, for example so-called switching rate. It shows the number of
extraction points with the changed suppliers to the total number of extraction
points in a given year.
Here you
may find figures for switching of gas and electricity supplier in
recent years (Source: URSO 2011 annual report)
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