PretCorectLaGaze. Resemblance between contracts concluded in Swiss francs and contracts to be concluded in the free gas market

by Dumitru Chisalita, Energy Expert

170,000 customers will conclude gas purchase contracts this year, signing clauses that will become, within several years, so burdensome that many customers will not be able to pay their bills. Then, as in the case of Swiss francs, institutions will blame customers. The PretCorectLaGaze (Fair Gas Prices) campaign aims at preventing this situation and will present some of these clauses. Gas market liberalization for non-household customers has highlighted practices through which suppliers have imposed damaging commercial clauses for customers, clauses which result in a gas cost different from the contractual price. Non-households that have initiated negotiations with gas suppliers considered price negotiation. Suppliers that defined customer profile have reacted quickly and offered gas at an “attractive” price, taking advantage of naivety of customers in interpreting clauses of the contract provided by the supplier. Thus, a number of “traps” were laid to customers, bringing the specific gas costs above the price quickly embraced by customers. Together with manipulation of capacity reserved in the transmission system (about which we have written), other clauses are introduced in gas sale-purchase contracts, which we highlight below:

The annual consumption program of the customer, which becomes, together with the capacity reserved in the transmission system, an element allowing suppliers to limit or cease deliveries, but also determines the payment of penalties by consumer when it does not observe this program, thus increasing gas prices. Abusive clauses do not consist of including this program in the contract, but in the way in which this instrument is used to the detriment of the customer. Thus, some suppliers have imposed the right to refuse the customer’s programs, accepting only their programs, customer facing payments for any deviation from a program that is not his. Together with this situation, clauses were imposed, impossible to apply for most customers, monthly nomination, daily nomination, daily renomination, but which are left to be achieved exclusively by the customer. Suppliers, knowing that they cannot observe them, speculate and charge their mistakes. The supplier has included clauses under which, without a prior notice, it can limit or disrupt gas supply if the supplier has delivered and the customer has consumed the amount stipulated in the consumption program. In other words, if it is found in the middle of the month that the consumption program was exceeded, the supplier, without even announcing its customer, may stop the delivery. The purpose of this clause is not stopping gas deliveries, it is the announcement that will come in full winter and show that the alternative of this situation is buying a much more expensive gas.

Attractive prices, but with clever clauses lead to expensive gas

Suppliers, in order to protect some consumers (consumer that have not negotiated, accepting higher prices), have put for others a clause under which they can reduce gas supplies, in conditions in which the safety and integrity of systems is endangered.  In Romania there is no legislation to entitle the supplier to stop gas for such a reason. Suppliers have included a clause through which ANY tax, fee, governmental burdens etc. referring to the subject matter of the sale-purchase contract will be exclusively incurred by the customer. Moreover, clauses stipulate that at the occurrence of these situations the contract is considered rightfully amended, without the possibility of negotiating or reanalyzing the contract. In turn, the same suppliers were careful to impose a clause through which, if during the execution of the contract changes occur in the gas market, the suppliers are entitled to unilaterally change the price of gas. At the same time, in such situations unfavorable for the supplier, it is entitled to terminate the contract for convenience, while the customer needs the supplier’s approval.

Moreover, if the customer wants to terminate the contract, it undertakes to pay to the supplier:

– all costs incurred by supplier with gas storage for the customer. This in conditions in which the amount stored for the customer is set unilaterally by the supplier, which is able to impose almost any value.

– all costs related to the reservation of the transmission capacity in case of failure to take over the entire amount reserved in the transmission system from the moment of termination and until the end of the gas year. This in conditions in which the capacity reserved in transmission systems for the customer is, also, set unilaterally by the supplier.

Even the term of force majeure was changed and adapted by suppliers for their benefit, thus protecting themselves from a number of events which would have been attributable to them. Lack of involvement of institutions in massive information campaigns and lack of customer awareness will bring us in a situation similar to that of credit contracts in Swiss francs, and looking back is too late.

The Fair Gas Prices campaign aims at preventing future lamentations of customers and institutions, by warnings on the platforms:

Facebook https://www.facebook.com/PretCorectLaGaz?ref=hl

Twitter: https://twitter.com/PretCorectLaGaz

Blogs: www.dumitruchisalita.ro, www.adevarul.ro, www.enpg.ro, www.energy-center.ro, www.energynomics.ro, www.bizenergz.ro, www.contributors.ro, www.adevarulfinaciar.ro.

Starting with this issue, you can find the materials of the campaign PretCorectLaGaze in English: https://romaniascout.ro/category/fair-gas-prices/.