Czech energy regulator fines Elgas Energy a record six million crowns

The Energy Regulatory Office (ERÚ) has fined Elgas Energy six million crowns for unfair trading practices. This is the highest penalty imposed to date on a single supplier for conduct that harms consumers. According to the regulator, the company committed dozens of offences against consumers, including misleading customers and setting unreasonably high advance payments. Ekonomický deník reported this today, and the Czech News Agency (ČTK) subsequently confirmed the decision with the ERÚ. The fine is final, so the company can no longer appeal it.

Elgas Energy is no longer active on the market; the regulator recently revoked its licence. Last year, the company’s legal successor became Virtual Energy. The regulatory office has recently recorded a growing number of complaints about the company, mainly concerning the failure to refund overpayments on energy bills. ČTK is seeking comment from Virtual Energy.

The office pursued proceedings against Elgas Energy over a range of offences, so the fine is a cumulative penalty for all of them. There were dozens of offences, most of which took place during 2022, at the height of the energy crisis. Last year, the ERÚ fined Elgas Energy CZK 6.4 million for these offences. The company subsequently appealed the decision, and the office partially upheld the appeal, reducing the fine to the stated six million crowns.

Among the offences proven by the ERÚ, according to its decision, was an extreme increase in advance energy bills of up to 690 percent. Some customers were therefore paying advance bills of tens of thousands of crowns. The regulator also said that during the energy crisis Elgas Energy transferred customers to spot prices without their consent, even though prices were extremely high at the time. According to the office, the company told customers this would be more advantageous for them, which the ERÚ considers misleading conduct. The office also criticised the company for serious shortcomings in handling complaints. It said that some were not dealt with at all, while others were handled with delays of up to 297 days.

This is not the first penalty Elgas Energy has received from the ERÚ. Last year, the office fined the company CZK 1.2 million for late energy billing and withholding overpayments. The company had also been penalised before.

Elgas Energy succeeded the supplier Lidová energie, whose licence the ERÚ revoked some time ago because of debts owed to customers. Elgas Energy itself has also been off the market since last year, with Virtual Energy becoming its legal successor. The regulatory office recently announced, however, that it had recorded a growing number of complaints about Virtual Energy, mainly concerning the failure to refund overpayments on energy bills. The office also said in March this year that it was investigating suspicious offers from Virtual Energy to recover energy bills or overpayments. According to the ERÚ, a person has been contacting potential clients and promising to arrange for Virtual Energy to issue missing bills and refund overpayments. The office says this is a scam and is therefore preparing a criminal complaint. The company has distanced itself from these activities and denied any unlawful conduct or violation of customers’ rights.

The fine for Elgas Energy is the largest the office has imposed on a single company in a single proceeding to date. It surpasses the previous record penalty of CZK 4.75 million, which the ERÚ imposed on Armex Energy last year for unfair trading practices.