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From July 1st, 2007, these elements of everyday life could cost a little less, become more

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ecological and not become disconnected. The liberalization of gas and electricity markets

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is already a reality for consumers in nine member states. From July 1st, 2007, it comes

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into effect throughout the European Union. But what will the liberalization of the gas

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and electricity markets mean in practical terms? To fully understand the mechanism,

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you first need to take a look at the entire chain, consisting of the following. Production,

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generated on a national basis or imported from neighboring countries. Transport, to

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feed electricity and gas into the distribution network, and energy suppliers, whose role

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it is to take care of commercial aspects and the billing of customers. Before liberalization,

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this entire chain was more or less a monopoly, carried out by one and the same body. But

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in the future, following a European Commission initiative which began the complex process

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of opening up the markets a decade ago, production and supply will have to be completely independent

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of transport and distribution. From now on, there should be free competition between suppliers.

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So what are the benefits of the opening up of gas and electricity markets? First of all,

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competitive prices. The only way to get lower prices is to encourage competition. But encouraged

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competition can be done only by customer, when customer is able and has a possibility

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to switch suppliers. Because only in this way suppliers have incentives to provide the

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best service, but also to come with a price. The most significant effect of liberalization,

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the emergence of a market price. In fact, over the past few years, electricity prices

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have remained reasonably stable, despite a marked increase in the cost of primary fuels.

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The possibility of choosing a supplier is a right and not an obligation for the consumer.

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But to be able to use this choice, he or she must first be in possession of all the information.

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In Britain, for example, where there's been liberalization for several years now, it's

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clear how important independent organizations such as Energy Watch are.

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For the market to work, of course, consumers have to be informed. Where consumers aren't

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informed, markets fail. And Energy Watch has recognized that. So it has lots of ways

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in which it provides information to consumers. First, on our own website, we publish the

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tariffs and the quality of service and complaints information about all the suppliers.

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For this young London couple, the website of the independent organization Energy Watch

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is an invaluable tool in their household. At the click of a mouse, by simply introducing

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a postcode and an estimate of yearly consumption, a comparative chart immediately shows the

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prices offered by the various suppliers.

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With websites like Energy Watch, it does mean that we can just very easily compare a lot

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of different energy providers, because one of the problems is as soon as you have a number

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of different providers, it's difficult to make a decision about which is the cheapest

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one or which is the most green.

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The goal of liberalization is to guarantee competitive prices, but also to strengthen

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the European network, to optimize the connections between the various member states, and to

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be able to guarantee supply for all the consumers in the Union.

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It's very good, a lot of benefits for the creation of European grid, and in particular

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in the situation where we are fighting climate change and where we are trying to diversify

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our supplies to avoid situation having no gas or no oil.

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This means it's important to have careful monitoring of the way the markets operate

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in all the member states for both electricity and gas, and also to guarantee genuine competition

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between the various suppliers, a role played by national energy regulatory authorities,

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the competition authorities, and the European Commission.

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The European regulators of electricity and natural gas are national public authorities.

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They are independent, i.e. independent of the actors of the sector, of the suppliers,

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of the network managers, and their main role is to open the market, to ensure effective

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competition on these markets.

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In certain countries, there's been a progressive opening of the markets. Belgium, which is

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divided into three regions, or Flanders, its northern part, liberalised in 2003. In

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the capital, Brussels, and in Wallonia, there's only been open competition since January 2007.

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So how are things going for the customers in Wallonia?

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But in order to choose their supplier, customers have a huge amount of information to deal with.

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So what tools are available to help them?

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For this retired couple in the Liège region, it's important to make the right choice of

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supplier. To shed some light on the situation, they can turn to consumer magazines, documentation

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from the different players on the market, and comparison charts available on the Internet.

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Even so, some scepticism remains.

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With these sorts of questions, the different suppliers are forced to improve their customer

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communication.

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The European Regulators Group for Electricity and Gas, ERGEG, has published a brochure describing

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the practices to improve information across the union.

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Starting on July 1, 2007, D-Day, the European Commission, together with the Regulators Group,

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is launching a big information campaign in the newly liberalised member states.

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But it's vital that customers also do their part and play an active role in informing

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themselves.

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I'm very much attached to this responsible consumer behaviour. And the first step to

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be responsible is to know.

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But is there any risk in changing supplier? The answer is a clear no, because liberalisation

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doesn't mean deregulation. In fact, quite the opposite.

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But to strengthen the focus that consumer is the most important issue, not the energy

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providers, we are elaborating an energy consumer charter that will describe all the rights

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that consumers can exercise.

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Clear information, simplified forms and administration for changing suppliers, better protection

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for vulnerable citizens, and more protection against unfair commercial practices from suppliers.

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These are rights which are already guaranteed and will be set out in a European Charter

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of Energy Consumers' Rights.

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The charter is very important because it will put in a nutshell what we are targeting for

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having empowered and better informed consumers.

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Information which will allow customers to make an enlightened choice in the future.

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By the very fact that the consumers have a choice, I think that that means all the providers

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are forced to keep quite competitive.

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So, in real terms, my gas bill and electricity bill have gone down, I don't know, by maybe

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50 or 60 pounds per year.

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If July 1st 2007 is the key date for the liberalisation of the gas and electricity markets, the process

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doesn't simply end there.

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To guarantee free choice and to respect the rights of consumers, the European Commission

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will oversee the opening of the markets and make sure that competition between suppliers

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is effective throughout the whole of the Union.