Adjustment clause: Reply to the government from the Commission

Rapture to the Mitsotakis government is the answer given by the competent Energy Commissioner of the Commission, K. Simson, in question of the SYRIZA-PS MEPs for the adjustment clause, submitted on the initiative of Elena Kountoura.

The reply is full of innuendo and states that the Commission is in the process of assessing the transposition of the Electricity Directive - which establishes rights and safeguards for consumers in relation to pricing - into national law in Member States.

At the same time, it points out that reserves the right to take further action against Greece for not having transferred it yet, if necessary, leaving clear indications of possible sanctions.

In its reply, the Commission encourages and encourages judicial investigation of cases of misapplication of the indexation clause to the judicial authorities of the Member States.

In particular, the Commissioner says that the European Union Directive on unfair terms in consumer contracts requires them to be fair and transparent in relation to their modification to the price originally agreed. 

Contractual clauses should «not create a significant imbalance in the rights and obligations of both parties to the detriment of the consumer» and goes further by noting that «the consumer must be able to foresee the possible financial consequences of clauses introduced on the basis of clear and understandable criteria».

With this reply the Commission makes clear its opposition to the unfair and deliberate practices of certain providers which passed on electricity increases to consumers through «adjustment clauses», which were often inserted in the relevant electricity supply contracts, generally in non-obvious ways (in small font on the back of bills and with cryptic content), with references to regulatory texts unknown to the consumer public, and with complex mathematical equations), making it practically impossible for a non-specialist consumer customer to identify the adjustment mechanism and to predict its possible financial consequences.

The question of the MEPs of SYRIZA-PS to the Commission

Priority question with request for a written answer P-001685/2022
to the Commission
Rule 138 of the Rules of Procedure
Elena Kountoura (The Left), Dimitrios Papadimoulis (The Left), Konstantinos Arvanitis (The Left), Petros Kokkalis (The Left), Alexis Georgoulis (The Left), Stelios Kouloglou (The Left)

Subject: Violation of European law by Greece to the detriment of electricity consumers
Recently, Greek society has been facing an unprecedented wave of increases in electricity bills. Greece has the most expensive electricity in the EU to non-household consumers and the highest price at wholesale. .
Whereas:
- Article 5 of Directive 2019/944 provides that Member States may, by way of derogation, apply public intervention to fix prices for the supply of electricity to energy-poor or vulnerable citizens under certain conditions, ,
- the Commission has opened an infringement procedure against Greece (INFR(2021)0037) for failing to transpose the Directive into national law, ,
- those increases were passed on to consumers by means of «adjustment clauses» which were often inserted ex post in the electricity supply contracts concerned, generally in a non-obvious manner, in breach of the principle of transparency and the information requirement laid down in Articles 10(3) to (5) and 18(1) of Directive 2019/944 , and of the conditions of validity laid down in Directive 93/13/EEC. As a result of this method, consumers were faced with excessive charges.
The Commission asks:
1. Does it believe that the applied indexation clauses are sufficiently “transparent” under Directives 2019/944 and 93/13/EEC, since they do not specify the specific indexation mechanism in a comprehensible manner and have not been made sufficiently known to the non-specialist consumer customer?;
2. What measures do you intend to take to force Greece to incorporate the directive, to implement European law and to protect consumers?;

The Commission's reply on behalf of K. Simson

EN P-001685/2022 Answer given by Mrs Simson on behalf of the European Commission (4.7.2022)

Directive (EU) 2019/944 on electricity establishes rights and protections for customers in relation to contractual terms and pricing. Accordingly, contractual terms must be fair and known in advance and customers must be notified of any intention to modify those terms and of any adjustment of the supply price. Electricity customers have the right to receive clear, comprehensible and transparent information, as set out in various provisions of the Directive.

The Commission is currently in the process of assessing the transposition of Directive (EU) 2019/944 in all Member States, including Greece, and analysing the national measures. Once this process is completed, the Commission will take further action if necessary.

In addition, Directive 93/13/EEC on unfair contract terms also requires all clauses in contracts concluded with consumers to be fair and transparent, including as regards the modification of the originally agreed price. Contractual clauses should therefore not create a significant imbalance between the rights and obligations of the parties to the contract to the detriment of the consumer and the consumer should be able to foresee their possible economic consequences on the basis of clear and comprehensible criteria. .

It is the primary responsibility of national authorities and courts to assess the application of these directives in individual cases.