Abstract/Summary

Public opinion in various EU Member States increasingly perceives energy prices as unreasonable. Primarily owing to distributional concerns, state interference with the liberalised retail energy market is ever-present across many EU Member States, despite its implications for the development of competitive (national and EU) energy markets. Rather than solely engaging with the conditions of state intervention as such, this article takes a step back and argues that an appreciation of what constitutes a reasonable price for energy supply is a necessary prerequisite in determining the relevance, scope and conditions of state intervention in retail energy prices. In the absence of a definition of the concept in secondary legislation, it offers a novel conceptual framework centred on the contextual interpretation of “a reasonable price for energy supply”. The article offers two understandings of reasonableness: one underpinned by the principle of market competition and the other understood as affordability. It elaborates on the different set of conditions and criteria against which they are judged and it explains how these have informed various instruments enshrined in the energy liberalisation directives for achieving reasonable prices for end-consumers. Its broader aim is to contribute to a more nuanced understanding of what is meant by a “reasonable retail energy price” within the context of national and EU competitive retail energy markets and explore how the resulting tension between the two understandings of reasonableness is accommodated in the broader EU constitutional and institutional context.