Energie-Nederland’s response to ACM’s Heat Efficiency Monitor publication

The regulatory body Consumer & Market Authority (ACM) published its Heat Performance Monitor 2021-2022 today. The publication shows that the weighted average profits in the heat sector were only 2.7% in 2022. Energie-Nederland stresses that strong growth in the number of heat networks is needed to meet the goals of the Climate Agreement, but that it is necessary that profits do not drop any further in order to maintain the willingness to invest.

Increased energy prices have led to the increase in tariffs in the heat sector. Heat suppliers face rising purchase costs for natural gas, electricity, residual heat, and renewable energy. This made increasing the tariffs necessary to cover the higher costs and achieve a reasonable profit.

It is important to note here that heat companies have been operating a cost-plus system for many years in anticipation of the Collective Heat Act. This means the tariffs are no higher than necessary to cover the costs and achieve a reasonable profit. What’s more, heat companies kept tariffs on average 18% below the maximum variable tariff in 2022, showing companies’ commitment to reasonable rates for consumers.

Energie-Nederland advocates an assessment of the longer-term profits, as the returns of a heat network are influenced by many factors. In addition, the industry association is in favor of the proposals for a new tariff methodology in the new Collective Heat Act. Here, tariffs are determined by the cost price plus a reasonable profit. This would align well with the characteristics of the sector and contribute to public support for collective heat solutions.

Read more: Authority for Consumers and Markets (ACM): Heat suppliers’ profits not increased in 2022, despite higher maximum tariff | ACM.nl

Related news