On 4 July 2008 the Lower Chamber of Parliament has adopted a legislative proposal regarding the amendment of the Electricity Act 1998 and the Gas Act to improve the operation of the electricity and gas market in respect of small consumers (hereinafter referred to as: the "Meter Act").

Background and purpose

Since 1 July 2004 the electricity and gas market have been deregulated. The foregoing means that as of 1 July 2004 all small consumers of electricity and gas have the freedom to choose their supplier. After deregulation of the electricity and gas market it appeared that the administrative process between suppliers and grid managers progresses with difficulty (i.e. the exchange of data and the process of invoicing of performed services). The Meter Act tries to resolve those difficulties in order for small consumers to be able to choose their supplier without administrative difficulties.

Content

The Meter Act regulates the following: (i) introduction of a suppliers model (leveranciersmodel) in respect of invoicing both the supply and transportation costs by the supplier; (ii) introduction of a fixed fee with regard to transportation costs for electricity; (iii) the installation of a meter readable from a distance (hereinafter referred to as: "Smart Meter") at all households and small companies; (iv) introduction of a standard agreement in respect of the supply of electricity and gas; and (v) introduction of a due date in respect of invoices to be submitted by grid managers.

Suppliers model

This Meter Act provides for a legal basis of the suppliers model which is, in practice, already being used for several years. The suppliers model intends the customer to receive one invoice in respect of both supply and transportation costs. This invoice will be sent by the supplier to the customer. Should the customer have any complaints or questions in connection with the invoice, he should address these to the supplier. Therefore, the first point of contact, also for transportation costs, will be the supplier and not the grid manager. It is reasonably expected that the suppliers model will improve the services to the customer, reduce the costs which directly relate to the administrative process and simplify the administrative process.

Fixed fee

In connection with the suppliers model, in stead of billing costs actually incurred, a fixed fee will be introduced with regard to the transportation costs for electricity. The outstanding (fixed) fee for transportation costs is to be settled in advance. It is expected that all costs incurred by grid managers in respect of transportation of electricity will be covered by the fixed fee. The effect of the introduction of such fixed fee should be that the risk of errors in respect of processing data and invoicing will be reduced significantly. In addition, because of having fixed fees for transportation costs, consumers will be able to compare the supply costs invoiced by the different suppliers in better detail.

Smart Meter

Smart Meters measure how much electricity is used and when, and allow utilities to retrieve the data real-time via public wireless networks. The installation of the Smart Meter at every household and at all small companies will impulse energy savings in the Netherlands. Small consumers will easily obtain understanding of their energy consumption by the instalment of Smart Meter. Furthermore, it is to be expected that the installation of such meter will simplify the administrative process.

Standard supply agreement

By the introduction of a standard agreement for the supply of electricity and gas, small consumers will be able to select the most attractive supplier and compare the different suppliers and their services in better detail. This standard agreement will be drafted by the Netherlands Competition Authority (Nederlandse Mededigingsautoriteit).

Due date for submission of invoices

A due date for submission of invoices is introduced to oblige grid managers to submit these within reasonable time which should also reduce payment arrears of consumers. Grid managers must submit their invoices within 2 (two) years to the consumer after the grid manager has provided its services to the respective consumer. If the grid manager failed to do so within the 2 year period, the right to submit an invoice to the consumer has ceased. No transitional provisions in this respect have been included in the Meter Act.