12/02/15

Belgian Competition Authority Finds No Anticompetitive Agreement between Electricity Suppliers on Cost of Green Certificates

On 12 December 2014, the Belgian Competition Authority (Belgische Mededingingsautoriteit / Autorité belge de la Concurrence) ("BCA") found that electricity suppliers EDF Luminus SA, Eneco België NV, ENI Gas&Power NV, E.ON Belgium SA, Essent Belgium SA and Lampiris SA did not infringe Article IV.1 of the Code of Economic Law (Wetboek van Economisch Recht / Code de droit économique) and/or Article 101 of the Treaty on the Functioning of the European Union by illegally coordinating the way in which they passed the cost of the green certificate on to their customers from 2005 to 2012 (See, VBB on Belgian Business Law, Volume 2014, No. 12, available at www.vbb.com).

Green certificates are virtual certificates delivered to producers of green energy. They are purchased by electricity suppliers, which must deliver a predetermined quota of green certificates to the Belgian energy regulators on a yearly basis. The cost of these green certificates is then passed on to the customers of the electricity suppliers.

In September 2011, the Flemish energy regulator VREG had indicated in a report that several electricity suppliers had decided in parallel to pass on the cost of green certificates to their customers in the form of a "green contribution" calculated on the basis of the amount of the fine which the electricity suppliers would receive in case of non-compliance with their obligation to deliver green certificates to the regulators instead of on the basis of the actual purchase price of the certificates.

Following this report, the College of Prosecutors (Auditoraat / Auditorat) of the BCA decided to open an investigation and carried out inspections at the premises of several energy suppliers in October 2011 in order to determine whether these suppliers had coordinated their calculation method of green contributions.

However, the inspections did not return any evidence of any direct exchange of information between the targeted companies. Also, the responses of these companies to the BCA's requests for information showed that the method for calculation of green contributions had evolved over the period under scrutiny.

In addition, the College of Prosecutors found that many reasons other than anticompetitive practices could explain the electricity suppliers' parallel behaviour.

First, the College found that the market for the supply of electricity to residential customers is highly transparent due to the comparative tools available on the energy regulators' websites and to the suppliers' tariffs and terms and conditions published on their own websites. Suppliers can thus gather information on their competitors' commercial policy without having to contact them.

Second, all suppliers active in a region are subject to a uniform regulatory framework, which includes identical fines in case of a breach of their obligations regarding green certificates.

Third, the green contribution is by nature a specific type of fee, since it does not entail the transfer of any green certificate to the customer. This can explain the electricity suppliers' decision not to integrate the green contribution into the price of the electricity supplied to customers.

Based on the above, the College of Prosecutors concluded that no charges for anticompetitive agreement or concerted practices could be levelled against the electricity suppliers concerned in the context of the market for green certificates from 2005 to 2012. The College of Prosecutors therefore decided to close the case.

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