Why are the unions attacking the free electricity and gas market?
Filctem Cgil, Flaei Cisl and Uiltec Uil attack the government for the transition from greater protection to the free market in electricity and gas. But their fears are unfounded or exaggerated. All the details
According to the secretaries of Filctem Cgil, Flaei Cisl and Uiltec Uil, the transition to the free market for domestic gas and electricity supplies – from January 2024 in the first case, from April 2024 in the second – is a "crazy and irresponsible" decision by the government , which decided not to extend the so-called greater protection regime.
According to Ilvo Sorrentino (Filctem Cgil), Amedeo Testa (Flaei Cisl) and Marco Pantò (Uiltec Uil), the free market "will throw millions of families to a plethora of unscrupulous sellers", in a context of "far west that will create further confusion and uncertainty among consumers who will find themselves having to navigate complicated offers, risks of error and, […] real scams".
WHAT THE UNIONS ARE WRONG ON THE FREE MARKET
The reality, however, is different from that described by the three unions. First of all, the transition from greater protection to the free market will not be mandatory for everyone, unlike what is written in the press release (which talks about "forcing millions of Italians"). For users in vulnerable situations – for example recipients of social bonuses, people with disabilities and elderly people over 75 years of age – a special regime is foreseen to be maintained, both for electricity and gas, with prices and contracts established by the regulatory authority, Arera.
For non-vulnerable domestic users, however, the transition to the free market will not be immediate but rather gradual. Unless the free market is expressly chosen, in fact, gas users will be placed in a placet regime, i.e. with standard and "regulated" conditions; Electricity users who switch to a new supplier via auctions will similarly remain subject to regulated conditions for a few more years.
As for the "unscrupulous" sellers evoked by the unions, the truth is that companies on the free market – net of possible scams – will still have to refer to wholesale energy prices, as well as having to propose attractive offers to attract or retain customers. It is true, however, that the free market, in general, can have higher prices than those in the greater protection regime.
– Read also: The pirouettes of Pd, M5s and Lega on electricity and gas bills
DOES LIBERALIZATION DAMAGE ENEL?
In Il Foglio, the liberal economist Carlo Stagnaro wrote that "with the end of greater protection, the customers involved will not be pushed directly onto the free market, but will be served by a new supplier at very likely improved conditions. The reason for this step […] is that the degree of concentration of the electricity market is beyond the warning levels". This is because the dominant operator, Enel, alone owns a 60 percent share: more precisely 59.1 percent, between the free market (32.2 percent) and the protected market (26.9 percent), according to 2022 data released by Arera.
In the same year, the total share of the other sellers was much lower: that of A2A was 3.6 percent; that of Hera of 3.3 percent; that of Acea of 3 percent; that of Iren of 2.9 percent; that of Eni of 8.4 percent.
According to analysts, the transition to the free electricity market will favor local utilities , such as A2A or Hera. While it will, at least partially, disadvantage Enel: this is because Enel, given its position as incumbent – that is, as a former monopoly company that continues to have a dominant position in a liberalized market – will see part of its customers reassigned to other suppliers.
UNIONS DEFEND CALL CENTERS
The unions also criticize the transition to the free market for the employment impact on call centers. “With the transition to the free market”, Sorrentino, Testa and Pantò argue, “call center employees will end up on the streets, together with their families, as no adequate form of protection and guarantee of employment continuity is provided for them”.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/mercato-libero-energia-critiche-sindacati/ on Mon, 11 Dec 2023 13:36:47 +0000.