ACM launches consultation on new rules regarding early-termination fees of fixed-rate contracts

The Netherlands Authority for Consumers and Markets (ACM) plans to adjust the rules regarding early-termination fees of energy contracts with fixed rates and fixed periods. The purpose of these adjustments is to give consumers and small businesses the opportunity again to take out fixed-rate contracts. In times of highly volatile and high prices especially, it is important that consumers are able to go for the certainty of a contract with a fixed period and a fixed rate. ACM asks energy suppliers, consumer organizations, and other stakeholders to respond to the proposed new rules regarding early-termination fees, and has published the draft version of the ‘Policy rule regarding reasonable early-termination fees of license holders 2022’ (in Dutch) for consultation on its website.

Consumers and small businesses that cancel their fixed-rate contracts before the end of the contract period now pay a fixed early-termination fee, for example a fee of 50 euros if the contract is still in effect for fewer than 18 months. Suppliers are worried that, because of the low early-termination fees, buyers with fixed-rate contracts will immediately switch suppliers as soon as energy prices go down. Suppliers are then stuck with energy that they purchased at high prices, but which the buyers had promised to consume. That is why they say they stopped offering fixed-rate contracts.

In ACM’s proposal for new rules, suppliers can use variable early-termination fees. The amounts will depend on the moment when the fixed-rate contract is terminated early as well as the financial losses suffered by the supplier as a result of that early termination. Suppliers are required to explain clearly the amount of the early-termination fee before buyers terminate their contracts. Although early termination of fixed-rate contracts will become more expensive for buyers, it is ACM’s belief that, as a result of this amendment, suppliers will start offering fixed-rate contracts again.

Interested parties have until November 4, 2022, to submit their opinions about the draft version of the policy rule. ACM will then finalize the policy rule, which will subsequently come into effect on January 1, 2023. The new rules regarding early-termination fees will only apply to energy contracts that take effect from that date onwards. The current rules will continue to apply to existing contracts.

See also

21-10-2022 Draft policy rule regarding reasonable early-termination fees of license holders 2022 (in Dutch)