EDP to appeal €7.5 million fine for 'disadvantaging' the already poor

The electricity regulator has condemned Portugal’s electricity supplier EDP for failing to supply energy on the low ‘social tariff’ which should be helping 500,000 of Portugal’s poorest families.

EDP Comercial announced today that it will appeal the fine of €7.5 million imposed by the regulator.

"EDP Comercial was notified today of the decision of the Regulatory Authority for Energy Services (ERSE) imposing a fine of €7.5 million for violations in implementing the Social Tariff and Extraordinary Social Support for Energy Consumers and will appeal the decision in the Court of Competition, Regulation and Supervision," read a statement by the former monopoly.

The Social Electricity Rate, Social Rate for Natural Gas and Social Extraordinary Support to Energy Users all are tariffs that the poorest in society qualify for so they pay a lower cost for essential energy.

Even the right wing Passos Coelho government realised that the poor needed some help with some of the highest electricity costs in Europe and set a target of 500,000 consumers who should be availed of discounted rates.

At the end of the third quarter of 2015, EDP had managed to sign up just 85,000 households, less than one fifth of the government target.

The ERSE fine resulted from the a number of offences by EDP, the main one being its delay in accepting legitimate ‘economically vulnerable’ social tariff customers, failing clearly to identify on invoices the social discounts available, the late or scant disclosure of information on the actual existence the social tariff and how to apply for it, and failing to instruct other energy suppliers about the promotion of social tariff discounts.

In short, EDP failed to push the discounts available as it wanted to sell its electricity at the higher price to as many people as possible, leaving those on highly limited incomes either to spend an inordinate amount on energy, or to have their supply cut off, the solution many have been forced to adopt.

The offences are punishable by fines of between 2% and 10% of EDP’s turnover but the company said there is no basis for the fine, adding rather weakly that "currently there are more than 90,000 customers of the EDP Group who benefit from social discounts and the estimate for the end of the year points to about 100,000 customers."

This remains way off the government target of 500,000 households but EDP seems happy that its lamentable progress has been the best possible that it could manage, claiming that it has been the “main promoter of the social tariff in the liberalised market by having done several multi-media campaigns" on the social discounts available.

In April, the regulator announced that it had opened inquiries into EDP Comercial and Galp Power which both were failing to provide information to potential beneficiaries, particularly on invoices.

This fine is the result and EDP has set its lawyers the task of appealing the regulator's conclusion thus wasting more time and effort that could be spent on fulfilling the social part of its corporate mission.  

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