The Lithuanian Competition Council has issued a warning regarding proposed amendments to the Law on Electricity, emphasizing potential adverse effects on competition within the electricity supply sector.
The proposed regulatory changes, aimed at allowing all household consumers to choose a public electricity supplier, could weaken competition among independent electricity suppliers and ultimately lead to negative consequences for consumers, according to the regulator.
Concerns Over Market Competition
The proposed draft amendment to the law would allow household consumers who have not signed contracts with independent electricity suppliers or have terminated their agreements to receive electricity from a public supplier. The Ministry of Energy has indicated that such a regulation does not align with European Union law, which permits only limited-duration intervention measures for energy-poor or vulnerable consumers.
According to the Competition Council, the proposed regulation could make electricity supply less attractive and predictable for independent suppliers, increasing market risks. This, in turn, may discourage suppliers from investing in the sector, thereby weakening competition and reducing the availability of competitive service offers for consumers.
Assessment of Alternative Regulation
The Competition Council has also reviewed an alternative proposal that remains under consideration. This alternative would allow small and vulnerable household consumers to continue using public electricity supply until December 31, 2029. The Ministry of Energy has been advised to evaluate whether extending public supply access for a longer period than previously planned is necessary and proportionate to the intended objective of consumer protection.
In its official position on the draft Law on Electricity, the Competition Council proposes that public supply should be ensured only for household electricity consumers using less than 1,000 kWh per year and for vulnerable consumers until January 1, 2030. Additionally, it is recommended that public electricity price tariffs be differentiated based on consumer groups to safeguard vulnerable consumers while considering social policy objectives.
