Belgium agrees with energy companies to lower advance payments

Belgium agrees with energy companies to lower advance payments
Federal Energy Minister Tinne Van der Straeten and State Secretary for Budget Alexia Bertrand. Credit: Belga/Nicolas Maeterlinck

Belgium's Federal Government and energy suppliers have reached an agreement to speed up the reduction of advance energy payments for people who need it most, announced Federal Energy Minister Tinne Van der Straeten and State Secretary for Consumer Affairs Alexia Bertrand.

In recent weeks, energy prices have fallen sharply and are now much lower than in the summer of 2022. However, due to the high advance payments many people are making on their energy bills, that drop in prices is not yet visible.

However, Van der Straeten stated that the drop "should be reflected" in the bill "in the very short term" for those who took out a variable contract between August and November 2022 – when prices peaked. "We are on the side of consumers who need to be able to handle their bills."

In Belgium, most consumers receive their advance payment bill on a monthly/quarterly basis. Those bills are an estimate based on the previous year's meter readings or the consumption history of the past three years – allowing customers to evenly spread the cost of their energy bills over the entire year.

Creating new protocols

At the end of the contract year, the settlement for the annual consumption follows, taking into account the advance payments already made. However, due to the high energy prices, Belgian households were urged to increase their advance payments to avoid an end-of-year "bill shock".

Now, prices have dropped again but many households – including those that already had trouble stretching their budget to the end of the month even before the energy prices went through the roof – are still paying these high advance payments.

According to Bertrand, energy suppliers also recognise that something needs to be done. "We have agreed that suppliers will make new commitments. We are going to do that through a protocol, because that is much faster than legislation."

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In practice, this means that suppliers will soon be writing personally to customers who signed a contract between August and November. Additionally, those who consumed less energy than stated should also "soon" see a reduction in their advance payments.

"In the long term, they are taking new commitments," Bertrand added. "During a period of four months, they are proactively going to look for all consumers who need an adjustment to their advance payments. Where it is a possibility, advances will go down."

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