Providers to be obliged to offer fixed-rate electricity and gas contracts in Flanders
Flemish Energy minister Melissa Depraetere will oblige energy suppliers to offer fixed contracts for both electricity and gas, to protect households against large price fluctuations and high energy bills.
Fixed contracts were the norm in Flanders for a long time. Until early 2022, more than 70 per cent of households had such a contract with a fixed price for both electricity and gas. During the energy crisis, with prices rising sharply, most providers scrapped their fixed contracts. Anyone who signed a new contract had to switch to variable rates.
According to Depraetere, this led to “enormous price shocks”, with energy bills sometimes reaching 1,000 euros per month and more, she said
Not all suppliers are offering fixed contracts again. At the end of 2024, such contracts were available from half of the players on the market – for electricity, for example, from 10 of the 21 suppliers – according to data from VREG, the Flemish utility regulator. Approximately 30 per cent of households had a fixed contract.
Right to a fixed contract
Depraetere is now introducing the right to a fixed contract because she wants “households to be able to choose certainty and clarity with every supplier”.
In concrete terms, the largest energy suppliers - with more than 200,000 customer connections - will have to offer a fixed contract of at least one year for electricity and gas from 2027.
"Households should be able to choose certainty and clarity with every supplier”
The large energy suppliers will also have to offer a variable or dynamic contract. With a dynamic contract, prices can fluctuate from hour to hour. By 2029, all energy suppliers, including smaller ones, will have to offer the three different contracts.
Additional cost
However, fixed contracts often come with an additional cost. VREG calculated that in 2024, households with a fixed contract paid an average of 254 euros more for electricity than households with a variable contract, and 375 euros more for natural gas.
This additional cost is explained as a “risk premium”. Fixed contracts are riskier for suppliers: customers can change contracts whenever they want, while suppliers are bound by the price and term laid down in the contract.
The price difference could possibly be reduced by reintroducing a cancellation fee for customers who terminate their contract. This measure is included in the federal coalition agreement.
#FlandersNewsService | Smart electricity meters © PHOTO ARTERRA
Related news
