Europe’s draft plan to cushion power price spikes

The European Union has drafted plans to nudge countries towards using more long-term, fixed-price electricity contracts, as part of a reform of Europe's power market designed to shield consumers from price spikes.

The European Commission is due to propose the reform on March 16, having pledged last year to reassess the electricity market rules after Russia cut gas supplies to Europe, leading to record-high energy prices and squeezed supply.

Here's what's in a draft of the EU proposal, seen by Reuters.

STABLE POWER PRICES

The aim of the reform is to leave consumers less exposed to short-term swings in fossil fuel prices, and make sure Europe's growing share of low-cost renewable electricity translates into lower bills.

Countries should do that by using more long-term contracts that lock in fixed electricity prices, according to the...