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ACM launches consultation on additional requirements for energy suppliers

In order to boost the financial resilience of energy suppliers, the Netherlands Authority for Consumers and Markets (ACM) will set additional requirements for businesses that supply electricity or natural gas to consumers. ACM has drawn up the draft version of its ‘Policy rule regarding the secure supply of electricity or natural gas and the continuity of energy suppliers’, and has published the draft policy rule on its website for public consultation in order to offer energy suppliers, consumer organizations and other stakeholders the opportunity to submit their views. The policy rule will have implications for all businesses that supply energy to consumers, including for new license applicants.

In March 2022, ACM decided to set additional requirements for suppliers following an external study into the regulation of energy suppliers, which was carried out by professors Femke de Vries and Saskia Lavrijssen. Over the past few months, ACM has held discussions with various market participants in the energy sector about their findings. On 12 May 2022, ACM organized a roundtable meeting, attended by energy suppliers, interest groups, policymakers, and fellow regulators. In addition, ACM asked risk-management and financial-oversight experts for advice.

Boosting financial security

All businesses that supply natural gas and/or electricity to consumers and other small-scale users must make sure their supply is secure, and are therefore regulated by ACM. According to ACM’s plans, suppliers must boost their financial continuity and risk management. For example, businesses will have to demonstrate that they are in excellent financial shape, they have a sound business plan, and that their buying strategy is sensible. And in order to show that they are also able to supply energy securely to consumers in the long run, suppliers must regularly draw up liquidity projections and scenarios. In addition, all energy suppliers must have a risk manager on staff who is able to conduct scenario analyses.

Market participants have until August 26, 2022 to submit their opinions on the draft policy rule, after which ACM will finalize the policy rule, which will then come into force on October 1. The purpose of the policy rule is to make energy suppliers more resilient to sudden increases in buying prices on the energy market. This will not prevent bankruptcies from happening, but it can reduce the likelihood thereof.

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