1 ergeg customer focus group workshop october 11, 2005, helsinki cedec gert de block secretary...

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ERGEGCustomer Focus Group

Workshop October 11, 2005, Helsinki

CEDECGert De Block

Secretary General

ERGEG CFG 11/10/2005 - CEDEC 2

OVERVIEW

1. Influence of market structure2. Conditions for switching3. General problems related to switching4. Particularities for local Distribution System

Operators (DSOs)5. Customer switching - Case of Belgium 6. Customer protection7. Conclusions


1. Influence of market structure

• Final date for complete market opening fixed and approaching, but still wide variety in eligibility

• Nationally chosen market model determines processes to be supported

• Essential role for distribution system operators controlling customer and metering data

• Dominance of historic market player(s) and degree of unbundling determines urgency of need for performant switching mechanism

• Role and impact of regulators varies


2. Conditions for switching

• Energy market is functioning :

(1) Only a market - with benefits for all customers in terms of price & service quality - if there is real competition

between suppliers : considerable number of players on national markets - but historical player(s) still dominant between producers : still limited number of players – virtual monopoly behaviour on regional / national markets

(2) Only a market – with non-discriminatory access to grids – if grid companies and their personnel and IT-systems behave neutrally


2. Conditions for switching

• Customers are eligible

• Change of supplier process supported by effective and efficient data exchange mechanisms between DSO and all market parties Need for :

- clear rules of the game agreed between parties- use of a same language- use of a safe medium- involvement of all market parties- exchange within reasonable timeframe- efficient information technology


3. General problems related to switching

• Diverse legislation different market models diverse technical rules even if EDIEL (common structures & codes) : diverse processes

• Risk of market data pollution Need for DSO to clean customer data before start-up of data clearing between market parties

• Location of customer data clearing : in each DSO or DSO-group or single national platform ?

• “Switch management” still to be developped after official market opening …


4. Particularities for local DSOs

• Unbundling leads to relative growth of fixed costs

• New regulatory environment leads to higher complexity Problem of scale for smaller DSO

• New needs in field of IT (switching) High cost in terms of investments and human resources (development of internal know how + external consultants) Problem of scale for smaller DSO with limited human resources capacities and financial constraints

• Risk of concentration between national / european players dominating lobbying power ? role of the regulators ?


5. Customer switching - Case of Belgium • Regions responsable for legislation on distribution

(minor) differences between regions in market structure and technical rules

• Municipal distribution companies have completely unbundled seperate companies for DSO and supply complete separation of personnel and IT-systems (for some distribution companies)

• Pro-active development of a common EDI platform (“Publiclear”) for 5 DSOs (20% of regional market) in Flanders fully operational on date of full market opening (1/7/2003)

• Other EDI-platforms of DSOs : “Indexis” (for mixed distribution companies in 80% of market); “Walclear” for 5 DSOs in Wallonia (20% of regional market) – Performance to be upgraded


5. Case of Belgium – Current status

• EDI platforms with inspiration from Scandinavian market Exchange of data in EDIEL (for electricity and gas)

• Message structure (UMIG = Utility Market Implementation Guide) inspired on international handbook for EDIEL

• Legislation + regulatory framework + technical codes processes translation into messages UMIG

• Several UMIG-versions already implemented : UMIG 1.0 (1/1/2003) … UMIG 3.5 (1/7/2006)


5. Case of Belgium – Current status

• UMIX structure : formal cooperation between all parties involved

• EDI platforms should perform following tasks :- management of access register (EAN-codes + data on

supplier & network user + technical characteristics)- SLP for non-AMR customers - allocation + reconciliation

• Medium to communicate :- VAN (high cost !) and FTP : between larger market parties - e-mail : for smaller players- web portal of DSO : for smaller parties (only limited number of

processes – only if no EDIEL infrastructure available)


5. Case of Belgium – Problems to be solved

• 3 regions 3 non-identical technical codes processes not 100% compatible

• 3 regions different market opening date implementation of UMIG not synchronized yet

• Some players refuse use of EDIEL (TSOs)• Initial UMIG-versions : too much room for interpretation / not all

scenarios defined / no rectification of processes manual interventions : expensive and laborintensive

• Risk of “Pollution” of access register : due to suppliers data & DSO systems

• SLP : sufficient number (4 E / 3G) ? lacking accuracy ?


6. Customer protection

• Code of good conduct for suppliers

• Harmonisation of supply contract conditions and billing presentation (mainly for residential customers)

• Harmonisation of DSO contracts & regulations regarding connection to the grid

• Solutions for “dropped customers” ?

Prepayment meters High investments and operational costs

• PSOs imposed on DSO : supplier of last resort / social tariffs


Conclusions

• Real competition between producers / suppliers is prerequisite, EDI platform can only contribute to smooth market functioning

• Development and operation of EDI platform is expensive

(investments / internal or external expertise / operational costs) cost of software (development)? cooperation between DSOs?

• Timely preparation within DSO and between all parties is crucial

• Different market models diverse technical rules “tailormade” processes problem for regionalisation of markets

1 ergeg customer focus group workshop october 11, 2005, helsinki cedec gert de block secretary...

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