ERGEG Customer Focus Group11.10.2005

Karima Björk, Svensk Energi

Four Nordic countries – one market

AgendaCustomer focus

Swedish experience

The deregulated electricity market

Grid

Generator

Generator

Generator

Market Place

Supplier

Trader

Customer Customer Customer

CompetitionMonopoly

Regional net

Local net

Customer

TSO

Production Consumption

Customer

Supplier

Amount of customers that have switched supplier or renegotiated

28 30 3037 35

4549

54 55

0

20

40

60

80

100

00-aug 00-feb 01-aug 01-mar 02-okt 03-sep 04-mar 04-okt 05-feb

%

8

79

148

67

18

39

67

1565

69

168

2

65

22

71

62

91

62

23

12

26

0

20

40

60

80

100

Never Once Twice Three or more

%

2001 Aug 2002 March 2002 Oct 2003 Sep 2004 March 2004 Oct 2005 Feb

Number of switching

3845

9

40

17

42

83

15

48

84

14

39

9

42

14

41

88

10

41

89

11

8889 88 88 91

0

20

40

60

80

100

Price comparision Degree of satisfaction Difficulties

%

2000 Aug2001 Feb2001 Aug2002 Mars2002 Okt2003 Sept2004 Mars2004 Okt2005 Feb

Degree of satisfaction switching supplier

Renegotiated contract or switched supplier

City and region

36

24

23

31

36

32

28

12

34

22

19

23

0 20 40 60 80 100

House

Apt.

Rural

Other cities

Sthlm/Gbg/Malmö

All

%Switch Renegotiation

66 68

5551 49 47 46

38 3632 32

0

20

40

60

80

100

00-aug 00-feb 01-aug 01-feb 01-aug 01-mar 02-okt 03-sep 04-mar 04-okt 05-feb

%

Certain of not switching

Contracts – domestic customers2001-2005

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

jan-01

jan-02

jan-03

jan-04

apr-04

maj-04

jun-04

jul-04

aug-04

sep-04

okt-04

nov-04

dec-04

jan-05

feb-05

mar-05

apr-05

maj-05

jun-05

jul-05

aug-05

3 year

2 year

1 year

Spot plus

"Normal"

Statistics Sweden

Customer confidenceDeregulation

24

18

22

19

15

25

22

23

26

25

42

49

45

49

46

46

45

47

50

53

14

13

13

13

18

13

18

12

11

11

15

13

13

8

11

11

5

5

16

15

0 20 40 60 80 100

Tot: Feb-05

Tot: Okt-04

Tot: Mar-04

Tot: Sept-03

Tot: Mar-03

Tot: Okt-02

Tot-Mar-02

Tot: Aug-01

Tot: Feb-01

Tot: Aug-00

%

very good good neither nor bad/very bad

Further development…….

Kundoffensiven – an Electricity Supply Industry Initiative

VarabygdensEnergiekonomiska

Förening

KommunalteknikTrelleborg

Implementation

Improving rules and regulations

Månadsavläsningföruts. för att fungera

Improvementprogramme

Monthly metering and settlement

Standardized invoice outline

Standardized customer information

Improving information flow between

players

Kundoffensiven – an Electricity Supply Industry Initiative

• Unique plant identity – EAN code

• Personal code number

• Shorter time for switching supplier

• Central function streamlining customer processes

Propositions Customer switching

Central function streamlining customer processes

• Common standard and technical solution for retail data exchange

• Managing interaction between players with high quality

• Cost efficiency, automated and reliable data access

• Supplier change, metering and reporting, balance data

Transparency of energy prices Price comparisons

• Legal framework –new legislation– Price Indication Act (Oct 1 2004), regulation on price

comparisons (July 1 2005)

– Electricity prices only

– ”Prices all inclusive” (energy taxes, VAT and green certificate fees)

– Price comparisons calculated for three customer categories according to Statistics Sweden

– Comparisons must be indicated in all advertisment and commercial (e.g. web sites, price lists, direct marketing, tele marketing)

• Availability of price information– Provided by the Swedish Consumer Agency (voluntary)

Transparency of bills

• Minimum level of information

– Specific invoice information (date, customer id, invoice number etc.)

– Meter number or similar

– Separate information on consumption, electricity and net services respectively

– Date:13 February 2005 (not 05-02-13)

– Payment information should be very clear including full VAT specification

• The invoice should be easy to understand – common terminology

Customer protection• Laws and agreements

– i.e Electricity Act– Voluntary agreements and industry recommendations

• Authorities and dispute settlement– The Swedish Consumer Agency– The Swedish Competition Authority – The Energy Markets Inspectorate within the Swedish Energy Agency – National Board for consumer complaints (ARN)– Public court

• Advice– Municipal consumer advisors– Municipal energy consultants– The Swedish Consumer Electricity Advice Bureau

TOMORROWTODAY

A common retail market