Vulnerable customer, protected customer and household customer

by Dumitru Chisalita, Energy Expert

Vulnerable customer, protected customer and household customer are notions that are confused in people’s minds. From a practical and legal point of view, between these notions there are major differences, which the future strategy has to properly clarify. If all vulnerable customers have to be protected, not all protected customers are vulnerable and not all household customers are vulnerable. Household customers (according to the gas law) are customers that buy natural gas for their own household consumption. To give more details, household customers are:

-customers using gas in order to heat their own spaces, to produce hot water and for cooking, in individual households and/or apartments, with individual metering;

-customers using gas in order to heat their own spaces, to produce hot water and for cooking, in individual households and/or apartments, with common metering;

– buildings for housing, no matter the ownership, under the administration of legal persons, public or private, including residential centers for people with disabilities, homes for the elderly, emergency children reception centers, maternal centers, boarding schools, dormitories which use gas for heating their own facilities, for cooking and hot water production.

Protected customers are customers for which gas supply must be ensured with priority, compared to other customers. Gas is an essential item of energy supply in the European Union, representing a fourth of primary energy supply and being mainly used for electricity generation, heating, as raw material for industry and fuel for transport. It determined the issue of Regulation no. 994/2010 of the European Parliament on measures to safeguard security of natural gas supply (Regulation which is binding in all EU member states) and which defines protected customers as: all households connected to the gas distribution network and, furthermore, if the Member State so decides, they may also include: (a) small and medium enterprises, provided that they are connected to a gas distribution network, and essential social services, provided that they are connected to a distribution network or gas transmission network and that all of these additional consumers represent no more than 20% of total gas consumption; and/or (b) district heating plants to the extent that they supply energy to households and consumers mentioned in letter (a), provided that these plants cannot run on other fuels and are connected to a gas distribution or transmission network. In Romania, not all categories of protected customers were defined, the only ones entering this category being defined under the EU regulation – households. Vulnerable customers are customers which, for grounded reasons, cannot benefit from energy needed to ensure subsistence needs. Thus, these customers are found in the category of household customers, but also those assimilated to household customers (hospitals, retirement homes, orphanages) can be enrolled in this category. The gas law in Romania gives the following definition of the vulnerable customer: end-customer belonging to a category of household customers which, for reasons of age, health or low income, risks social marginalization and which, in order to prevent this risk, benefits from social protection measures, including of financial nature. If the quality of household customer and that of protected customer do not change in time, a customer’s vulnerability is a state that can evolve from its existence to its non-existence. Because among household customers the income level is different, the law in force requires highlighting as vulnerable customers only those household customers who truly need help. Absence of such an approach determines social inequity, because it makes “rich” household customers to benefit twice, once they are not vulnerable they should not benefit from these advantages and the second time because they benefit from a larger subsidy (having larger houses, more equipment or even pools that consume energy above the average consumption). The system of regulated prices in Romania in fact brings all household customers in a situation of vulnerability, outside the legal framework. Thus, benefits from which “rich” customers benefit against the masses are masked. The share of gas expenses in the budget of poorer families, in winter months, is around 4 times higher than in the case of families with higher incomes. Eliminating regulated prices would bring additional revenues to the state budget, without a great burden on the budget of families with high incomes, but asking for additional funds to the budget enough to allow subsidizing part of the gas costs for vulnerable customers. Thus, we can get a decrease in the share of gas costs, in winter months, for customers with low income below the share of gas costs before market liberalization for household customers. Market liberalization for household customers, corroborated with the application of vulnerability criteria, would bring a lower cost (compared to the situation of regulated prices) with gas for really poor customers and would require an easily affordable increase for customers with high incomes. Presenting this situation, in a persuasive manner, in the idea of the need to maintain regulated prices for household consumers is not for the benefit of large parts of the population of Romania, a poor population, but favors a small number of household customers, those with high incomes.

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