RWE and HEP Clash Over Electricity

RWE Energija, the second largest electricity supplier in Croatia with over 105 thousand household users, warns that HEP is attempting to prevent direct electricity sales to other suppliers, thereby halting the development of a free electricity market. In fact, HEP has, in recent months, repeatedly warned citizens through announcements and advertisements in the media about “unfair and misleading sales methods of certain market suppliers.”

HEP, in its media statements, presents a series of unsubstantiated accusations against „certain market suppliers“, without providing specific data on who these suppliers or their sales representatives are that allegedly committed unfair and misleading actions to deceive citizens.

„The publication of such blanket warnings can only be interpreted as an unfair attempt to obstruct market competition and deny customers the right to choose their electricity supplier,“ stated Zoran Miliša, CEO of RWE Energija. „HEP has declared direct electricity sales illegal through its announcements, contrary to applicable legal regulations, by creating an atmosphere in which customers fear entering into contracts through direct sales. By doing so, HEP prevents the operation of suppliers who use the direct sales channel. Given that the majority of electricity customers have changed suppliers precisely by entering into contracts with our sales representatives in their own homes, HEP is actually trying to destroy the free electricity market by attempting to put a completely legal sales method outside the law.“

RWE Energija notes that direct sales are a legal and common form of sales in most European countries, including Croatia, and that the possibility of deceiving customers due to clear legal regulations and strict internal procedures has been minimized.

Therefore, RWE considers HEP’s practice of sending warnings to the public as an abuse of its dominant position under the Competition Protection Act, unfair business practice under the Trade Act and Consumer Protection Act, and misleading advertising under the Prohibition of Misleading Advertising Act.

HEP also violates several provisions of the Energy Act and the Electricity Market Act, as well as the provisions of the General Terms for Network Use and Electricity Supply to which HEP itself refers, RWE concludes.

HEP soon reacted to the accusations from RWE.

“Hrvatska elektroprivreda (HEP) firmly rejects the accusations made today by RWE regarding the obstruction of the liberalization process of the Croatian electricity market, as well as the claim that 50 percent of all users who wish to switch to RWE cannot do so due to „various obstructions by HEP.“ We emphasize that HEP welcomes the liberalization process but also condemns the unfair, immoral, and misleading sales methods of a few suppliers, which include false representation, forgery of signatures, unauthorized entry into citizens’ homes, misrepresentation of discounts, and entering into contracts with insufficiently informed elderly citizens,” they state at HEP.

HEP categorically rejects RWE Croatia’s accusations of obstructing market liberalization. On the contrary, HEP’s educational and informational campaign regarding consumer rights protection contributes to the creation of a mature and responsible market.

Informing customers about their rights when entering into supply contracts through field sales representatives is HEP’s response to numerous inquiries from concerned customers, media, and consumer associations. It is also an obligation arising from regulations issued by the Croatian Energy Regulatory Agency (HERA), which applies not only to HEP but to all electricity suppliers in Croatia. In this regard, HEP calls on RWE, as well as other suppliers, to adhere to the highest standards of consumer rights protection applicable in the European Union.

The impetus for the current educational and informational campaign was the fact that HEP received several dozen media inquiries and hundreds of complaints from citizens regarding the obviously unfair methods by which certain suppliers in the Croatian electricity market acquire new customers, they state at HEP.