VVD, CDA call for more checks on energy companies, return of fixed-term contracts

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Energy companies should be required by law to offer customers a long-term contract with fixed tariffs rather than focusing on flexible tariffs, as in the current market, say MPs from two coalition parties.

VVD MP Silvio Erkens and CDA Henri Bontenbal also say energy companies should be banned from offering a welcome bonus to new customers. The proposals are contained in a brochure to be presented to Energy Minister Rob Jetten later on Tuesday.

Both sides claim that the energy market, which was liberalized in 2004, is not working as expected and that the current price spike, spurred by the war in Ukraine, has made the weak points of the current system more apparent.

It’s high time the government clamped down on the energy market and got the cowboys out,’ Erkens told the Telegram.

“The government needs to make sure consumers know what they have to pay and that there’s always a sufficient supply of affordable energy,” Erkens said.

Currently, energy companies only offer variable tariff contracts, which do not give consumers any certainty about the amount of their bills, but guarantee that the companies have covered their own financial risks.

The VVD and the CDA want a return to long-term contracts – three years for example – with fixed charges. Customers who wish to terminate a contract early should compensate their supplier for the loss of revenue.

Furthermore, the parties state that energy companies should undergo an annual stress test to ensure that they are financially sound. There are currently 38 active providers on the Dutch market and several small ones have already gone bankrupt.

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