Penalties for changing electricity supplier before the deadline do not violate EU law

Advocate Maciej Obrebski comments on the statement of the General Spokesman of the European Court of Justice (CJEU), according to which national regulations allowing a contractual penalty for early termination of a contract with an electricity supplier by a small entrepreneur do not contradict EU Directive 2009/72.

Opinions of the legal community on the contractual penalty in energy law are divided. On the one hand, it is intended to protect the interests of energy companies that bear the costs of stable electricity supply. On the other hand, it may restrict the customer’s right to freely choose an energy supplier and benefit from more favorable price offers on the market.

According to advocate Obrebski, in the case of a contract for an indefinite period of time, the customer must not suffer undue restrictions in changing the operator, beyond such obvious ones as the termination of the contract. The situation is different in the case of a fixed-term contract and one with a fixed price guarantee.  It is the supplier who then bears the risk of price fluctuations in the electricity market, and the fixed term of the contract is supposed to ensure that it is profitable for him to provide the service. Otherwise, the conclusion of the contract by the supplier would be a veritable lottery for him, which cannot be reconciled with the standards of legal protection of the legal relationship to which he is a party. Providing the customer with the right to terminate the contract at any time would contradict the essence of a fixed-term contract.

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Author: Renata Krupa-Dąbrowska




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