marielle liikanen, chair rmf tf camilla egginton – project leader citizens’ energy forum,...

Marielle Liikanen, chair RMF TFCamilla Egginton – project leader

Citizens’ Energy Forum, London,21-22 October 2010

Customer empowerment through retail market monitoring

23rd Citizens’ Energy Forum, London, 21-22 October 2010

Outline

• Understanding the customer experience• Work process• Current monitoring practices

• 3rd Package requirements• Our recommendations• Adopting ERGEG’s guidelines – how do these affect the customer’s

experience?• Customer satisfaction • Retail market outcomes• Market structure• Market condition and DSO services

• Conclusion

33rd Citizens’ Energy Forum, London, 21-22 October 2010

Customer empowerment through market monitoring

In a well-functioning market, the customer is empowered…

…but how do we measure this?

43rd Citizens’ Energy Forum, London, 21-22 October 2010

ERGEG thought about the customers’ experience

Prices

…which is affected by market outcomes such as…

…and ultimately driven by…(i) Market structure

Choice

Complaints

Enquiries

Consumers may reveal their satisfaction through…

…and(ii) Market condition

No.of suppliers

Market share

Branding

Switching

Disconnection

Maintenance

Repair

53rd Citizens’ Energy Forum, London, 21-22 October 2010

Numerous stakeholders are responsible

Prices

…which is affected by market outcomes such as…

…and ultimately driven by…(i) Market structure

Complaints

EnquiriesChoice

Consumers may reveal their satisfaction through…

…and(ii) Market condition

No. of suppliers

Market share

Branding

Switching

Disconnection

Maintenance

Repair

Consumer Groups

Suppliers

Regulators

Consumers

Consumers DSOs

63rd Citizens’ Energy Forum, London, 21-22 October 2010

Work process

• Internal questionnaire• 11 members, describing national monitoring exercises

• In depth surveys of current monitoring practices • Consumer markets scoreboard (DG SANCO),

National reports, Benchmarking report, The Probe (UK)

• Public consultation• April - June 2010• 28 respondents

• Final GGP• October 2010

73rd Citizens’ Energy Forum, London, 21-22 October 2010

We found monitoring practices vary

Indicator Monitored Not monitored

Customer complaint 10 1

Customer enquiries 7 4

Customer information 6 5

End-user prices 10 1

Retail margin 6 5

Spread price 7 4

Diversity of contracts (offers) 5 6

Regulated end-user prices 7 4

Number of suppliers 11 0

Market concentration 9 2

Branding 3 8

Switching rates 10 1

Renegotiations 1 10

Delays in switching 5 6

Failure to fulfill the switch 6 5

Connections and repairs 8 3

Disconnection rates 7 4

Maintenance services 6 5

Number of NRAs who monitor indicators required by the 3rd Package (electricity)

Source: ERGEG internal questionnaire, based on 11 responding countries

83rd Citizens’ Energy Forum, London, 21-22 October 2010

…especially in light of the 3rd Package

Indicator Monitored Not monitored

Customer complaint 10 1

Customer enquiries 7 4

Customer information 6 5

End-user prices 10 1

Retail margin 6 5

Spread price 7 4

Diversity of contracts (offers) 5 6

Regulated end-user prices 7 4

Number of suppliers 11 0

Market concentration 9 2

Branding 3 8

Switching rates 10 1

Renegotiations 1 10

Delays in switching 5 6

Failure to fulfill the switch 6 5

Connections and repairs 8 3

Disconnection rates 7 4

Maintenance services 6 5

Number of NRAs who monitor indicators required by the 3rd Package (electricity)

Source: ERGEG internal questionnaire, based on 11 responding countries

93rd Citizens’ Energy Forum, London, 21-22 October 2010

Our recommendations

Customer complaints

Customer enquiries

Customer information

End-user prices

Price spread

Available contracts

% on regulated price

No. of active suppliers

Market shares

DSO branding

Switching rate

Renegotiated contracts

Delayed switches

Failed switches

Connection times

Repair times

Disconnections

Maintenance service time & charge

Our consumer-centric framework, category aims and suggested indicators

Derived from the 3rd Package

103rd Citizens’ Energy Forum, London, 21-22 October 2010

…note they come with a health warning

• None should be considered in isolation – results could be misleading– For example, a low complaints level suggests the market is working well –

but if this is combined with low numbers of enquiries, a low switching rate and rising prices, it could equally suggest that consumers are disengaged

• Results should be considered in relation to national circumstances and a qualitative understanding of the market

• Results do not deliver conclusions by themselves – deeper investigation may be required

• The list is not intended to be exhaustive, or prescriptive, and should be tailored to national requirements

113rd Citizens’ Energy Forum, London, 21-22 October 2010

How monitoring empowers the customer

1. Customer complains, enquires or experiences a delayed or failed switch

2. Responsible stakeholder must log the event

3. NRA collects and analyses the data

4. NRA could then consider further monitoring or deeper investigation…

5. …followed by action

1

2

3

4

5

Plus wider monitoring to ensure that the market is functioning well overall

123rd Citizens’ Energy Forum, London, 21-22 October 2010

Conclusion

ERGEG believes that:

• Monitoring which captures:• Customer satisfaction• Retail market outcomes• Market structure• Market condition and DSO services…in a holistic way enables key insights into the issues which may be affecting

market functioning

• Identifying these issues enables targeted action to ensure that the market protects consumer welfare

• Implementing our Guidelines will both aid compliance with the 3rd Package and lead to broader monitoring where this is valuable

Will help NRA to empower the customer and ensure

that the market is functioning well

133rd Citizens’ Energy Forum, London, 21-22 October 2010

Thank you for your attention!

Link to the report (click on the title):

GGP on Indicators for Retail Market Monitoring