Article 5
Market-based supply prices
1. Suppliers shall be free to determine the price at which they supply electricity to customers. Member States shall take appropriate actions to ensure effective competition between suppliers.
2. Member States shall ensure the protection of energy poor and vulnerable household customers pursuant to Articles 28 and 29 by social policy or by other means than public interventions in the price setting for the supply of electricity.
3. By way of derogation from paragraphs 1 and 2, Member States may apply public interventions in the price setting for the supply of electricity to energy poor or vulnerable household customers. Such public interventions shall be subject to the conditions set out in paragraphs 4 and 5.
4. Public interventions in the price setting for the supply of electricity shall:
(a) pursue a general economic interest and not go beyond what is necessary to achieve that general economic interest;
(b) be clearly defined, transparent, non-discriminatory and verifiable;
(c) guarantee equal access for Union electricity undertakings to customers;
(d) be limited in time and proportionate as regards their beneficiaries;
(e) not result in additional costs for market participants in a discriminatory way.
5. Any Member State applying public interventions in the price setting for the supply of electricity in accordance with paragraph 3 of this Article shall also comply with point (d) of Article 3(3) and with Article 24 of Regulation (EU) 2018/1999, regardless of whether the Member State concerned has a significant number of households in energy poverty.
6. For the purpose of a transition period to establish effective competition for electricity supply contracts between suppliers, and to achieve fully effective market-based retail pricing of electricity in accordance with paragraph 1, Member States may apply public interventions in the price setting for the supply of electricity to household customers and to microenterprises that do not benefit from public interventions pursuant to paragraph 3.
7. Public interventions pursuant to paragraph 6 shall comply with the criteria set out in paragraph 4 and shall:
(a) be accompanied by a set of measures to achieve effective competition and a methodology for assessing progress with regard to those measures;
(b) be set using a methodology that ensures non-discriminatory treatment of suppliers;
(c) be set at a price that is above cost, at a level where effective price competition can occur;
(d) be designed to minimise any negative impact on the wholesale electricity market;
(e) ensure that all beneficiaries of such public interventions have the possibility to choose competitive market offers and are directly informed at least every quarter of the availability of offers and savings in the competitive market, in particular of dynamic electricity price contracts, and shall ensure that they are provided with assistance to switch to a market-based offer;
(f) ensure that, pursuant to Articles 19 and 21, all beneficiaries of such public interventions are entitled to, and are offered to, have smart meters installed at no extra upfront cost to the customer, are directly informed of the possibility of installing smart meters and are provided with necessary assistance;
(g) not lead to direct cross-subsidisation between customers supplied at free market prices and those supplied at regulated supply prices.