Online in-depth information about energy suppliers in Germany

In Germany, there are currently at least 1,266 electricity and 853 gas suppliers active in the market. Many consumers can choose from dozens of suppliers and even more offers in their network area. A lot of new suppliers have entered the German market since its liberalisation in 2007. Many of them with new and innovative customer-tailored offers. Unfortunately, some suppliers attracted public attention because of their consumer-unfriendly behaviour, questionable terms and conditions, or because they had to file for bankruptcy.

For consumers who want to switch suppliers, several price comparison tools provide full information about supplier’s offers and some background information about the supplier itself. Nevertheless, in order to learn more about suppliers’ background and their level of service, consumers often have to rely mainly on information from the internet, i.e. from supplier’s websites or advertisements, other consumers’ reviews, supplier specific warnings by consumer organisations, information from the company register, the regulator, the dispute resolution body or newspaper articles.

Currently, 67% of customers have taken a conscious decision to enter into a contract with alternative suppliers or have switched to a special tariff offered by their local supplier. However, 33% of consumers in Germany still have a default supply contract with their local supplier.

The reasons why some households are still reluctant to switch suppliers cannot be monitored by Bundesnetzagentur.

These reasons could be manifold:

  • A switch might not generate enough financial benefits;
  • There might be long-lasting trust or relatedness to the local supplier;
  • Consumers might be reluctant because of inconsistent or negative information about a few individual suppliers;
  • They might not make the effort to search for all the information they deem necessary to make an informed switch; or
  • Consumers might simply struggle to evaluate all the information they find online.

A transparent and concise collection of background information on suppliers and their tariffs in a consumer- friendly manner and by a trustworthy source could help to overcome this information dilemma, where consumers are in a weaker position versus market players due to either a lack of information or an abundance of inconsistent information.

Therefore, the Federal Ministry of Justice and Consumer Protection (BMJV) together with Bund der Energieverbraucher e. V. (BdE), a non-profit association of German energy consumers, launched a joint initiative called “Informationen über Energieanbieter” (Information on energy suppliers) in spring 2014.

Their website gathers is for the first detailed and reliable (background) information on electricity and gas suppliers from all publicly available sources in a systematic way.

So far, the project has chosen more than 50 electricity and gas suppliers. It offers detailed material on each supplier with regard to

  • Formalities (e.g. business register entries)
  • Management, ownership and board of directors
  • Annual statements of accounts
  • Composition of terms and conditions
  • Consumer experiences
  • Evaluation of services
  • Electricity disclosure.

Given the large number of suppliers in the market, the project does not aim to be exhaustive. Special focus is put on suppliers with presumably low tariffs that strongly attract consumers’ attention. Consumers often want to know whether these tariffs are actually low and if there are potential difficulties related to these attractive offers. The focus is also on suppliers which play an important role in the market or are especially interesting e. g. because of their size, their level of services or their innovative products.

The information (see Figure (i)) has to meet the highest standards of objectivity and verifiability at the same time. The project does not provide a ranking. It lists suppliers in alphabetical order and provides more insight into consumer experiences and the quality of services based on a compilation of existing reviews from other websites, studies and user forums. It analyses supplier’s contractual terms with regard to consumer-(un)friendly terms or even legally dubious or illegal terms.

Before being published on the website, the suppliers concerned are contacted and asked to review the respective information on their tariffs and point to potential inconsistency. This is primarily done to avoid legal conflicts with suppliers, but it also provides suppliers an opportunity to adapt their terms and conditions or to rethink their level of service.

The overall aim of the project, which is to continue until mid-2016, is to provide a complementary tool to advise consumers and provide guidance beyond the pure price comparison and switching tools already on the market. The project aims to enable consumers to judge the quality of a supplier and its tariffs so that they can make an informed decision and experience the full benefits of the retail market. More strategically, information deficits on the consumer’s side should be minimised so as to strengthen their position vis-à-vis suppliers.

Source: ACER/CEER Annual Annual Report on the Results of Monitoring the Internal Electricity and Natural Gas Markets in 2014

November 2015

Segment-ID: 2349

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