February 2009


European Energy Regulators’ News

Issue: February 2009

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Table of Contents
- Regulators benchmark the quality of electricity supply and customer service across Europe

- ERGEG Letter to Commissioner Piebalgs on Russia-Ukraine gas dispute 
- Electricity Regulation Compliance Monitoring Report Conclusions paper
- Treatment of Electricity Losses Conclusions paper

Press Releases
- Quality of electricity supply improved by regulators’ incentive-penalty regimes (23 February 2009) 
ERGEG advises Commissioner Piebalgs on the lessons from Russia-Ukraine gas dispute (11 February 2009)

- ERGEG principles on CAM and CMP for Gas (18 February 2009) presentation slides

Region in the Spotlight
- Central-South electricity region

International Activities

- World Forum on Energy Regulation IV - programme and early bird registration
- CEER meets with Japanese Gas Association

2009 is proving to be an eventful year thus far, with a major gas dispute impacting gas supplies to Europe (the feature of last month's edition of the newsletter) and the negotiations on the 3rd Energy Package.

Lord Mogg, Chair of ERGEG, wrote  to EU Energy Commissioner, Mr. Piebalgs, on the lessons to be learned from the Russia-Ukraine gas dispute and the actions which could be taken to mitigate the impact of future disruptions.

Approximately 100 participants attended the ERGEG workshop on the principles for gas capacity allocation mechanisms and congestion management procedures (currently under public consultation until 20 March) . The workshop and consultation focus on improving access to gas transmission capacity across Europe.

On the electricity front, regulators published their 4th Benchmarking Report on the Quality of Electricity Supply, which provides an in-depth review of continuity of supply, voltage quality and commercial quality (see feature article below). This detailed report analyses data from 21 European countries and contributes to a better understanding of the quality of electricity supply levels and policy throughout Europe.

Regulators also published the results of two public consultations, on the Electricity Regulation 1228/2003 Compliance Monitoring Report (in 2008) and the Position Paper on Treatment of Electricity Losses by Network Operators. The consultations sought the views of stakeholders on the market situations (and problems) identified by regulators and possible ways of improvement.

In the Regional Initiatives, the efforts towards coherent regional markets continue to bear fruit.  The Central South electricity region  followed the good practice of other regions in adopting a regional-based Transparency Report. It sets out harmonised and minimum transparency requirements for market participants in the region.

Last, but certainly not least, the European energy regulators are pleased to announce the "early bird registration"  for the Fourth World Forum on Energy Regulation (WFER IV).  The conference programme is available online or from the CEER Secretariat.  We look forward to welcoming you to WFER IV from 18-21 October, 2009 in Athens, Greece.

Regulators benchmark the quality of electricity supply and customer service across Europe

In recent years, more and more regulators in Europe have introduced electricity quality incentive/penalty regimes in order to ensure that quality is not compromised as electricity companies seek to cut costs. Such quality regulation regimes seek to strike the right balance between requirements (quality level) and costs. Setting quality standards firstly requires robust and reliable data.

This week the CEER published its 4th Benchmarking Report on the Quality of Electricity Supply (see Press Release), which analyses quality of supply data from 21 European countries.

The report covers 3 types of electricity quality:
(1) the availability of electricity (i.e. continuity of supply);
(2) its technical properties (voltage quality); and
(2) customer service (commercial quality).

Unplanned electricity supply interruptions are falling in Europe
Continuity of supply concerns the frequency and duration of electricity supply interruptions.  The fewer the interruptions and the shorter they are, the better for Europe’s consumers and businesses.

Schemes for monitoring long interruptions (i.e. typically more than 3 minutes) already exist in 21 countries, and about half of these also monitor shorter interruptions. Different countries use different indicators for measuring the length of interruptions (e.g. customer minutes lost per year) and frequency (i.e. number) of electricity supply interruptions per year. Chapter 2 of the report contains detailed analysis of the durations and frequency of planned and unplanned interruptions, comparisons of urban versus rural interruptions in 6 countries, as well as information on the type of continuity of supply monitoring and on-site audits carried out in each country.

The report shows that the continuity of supply is improving, with customer minutes lost per year decreasing almost continuously since 2002, and the number of unplanned interruptions (excluding exceptional events) stabilising. CEER is working with CENELEC (the EU standards body) to develop harmonised continuity indicators, so as to improve the effectiveness of monitoring schemes.

Several European countries have estimated customers’ costs related to short and long interruptions. A large consensus exists regarding the methodology for assessing customer costs for long interruptions and there is significant empirical work. On the contrary, the economics of voltage quality is not yet a consolidated subject.

Europe’s voltage quality standard needs to be improved
The “usefulness” of electricity, when there are no interruptions, is described by the voltage quality. In a perfect world electricity supply would always be available, voltage magnitude and frequency would be equal to their nominal values and the voltage waveform would be a non-distorted sine wave. In reality, electricity supply is not always available, voltage magnitude and frequency deviate continuously from their ideal value and the voltage waveform is often distorted.

When the voltage quality (the usefulness) is very poor; several problems may arise in the use of electrical appliances and electrical processes; e.g. malfunction, breakdown, trip, damage, reduced efficiency, flickering lights and even fire.

CEER President, Lord Mogg, stated “Dips or swings in voltage can cause severe problems for customers and can carry heavy costs for businesses. It is necessary to have an appropriate voltage quality standard. CEER is not satisfied with the current European norms for voltage quality. Thus, we have been cooperating with CENELEC on the revision of the current standard (EN 50160) in a way which adequately meets consumers’ needs.”

Chapter 3 of the report contains information about existing and planned monitoring systems. 6 countries present data on voltage dips and 3 countries present estimates (based on national surveys) for customer costs due to poor voltage quality.  Currently 11 European countries have voltage monitoring systems in place. However, the voltage quality data in Europe suffers from a lack of harmonisation (e.g. type of network to be monitored; number and percentage of network points to be monitored and criteria of selection of network points under monitoring; voltage quality disturbances to be monitored and type of monitoring: continuous, rolling, etc.).

Guarantee Standards are the best tools to improve electricity customer service
Chapter 4 of the report deals with “commercial quality” which relates to the customer service provided by Distribution System Operators (DSOs) and/or electricity suppliers, such as the response time for solving billing complaints. The report details the number and type of “commercial quality” standards, and the amount of compensation to be paid in the case of Guaranteed Standards (GSs).

The report shows that commercial quality standards exist in several countries for (1) connection; (2) customer care; (3) technical service; and (4) metering and billing. Many regulators set “Guaranteed Standards” (GS) for electricity DSOs whereby the company has to pay compensation to the electricity customer if it does not meet the customer service standards set by the regulator. For some GSs, the customer needs to make a claim, whereas for others the payment is automatic. Alternatively the regulator can choose to set an Overall Standard. In addition to GSs and OSs, regulators can set “Other Available Requirements” (OARs) in regulation in order to achieve a certain quality level – if not met, the regulator can issue a sanction (e.g. a financial penalty).

Lord Mogg stated “Money-back Guaranteed Standards or setting minimum requirements where the regulator can impose a sanction are the best tools for ensuring proper customer service. GSs allow customers to get money back from their electricity company if it doesn’t provide an adequate service. CEER has benchmarked the quality of electricity supply and service across Europe. Now we will work with consumer associations to make sure that electricity consumers are aware of their entitlements. For example, in Hungary, a householder can claim €20 compensation if the distribution company doesn’t keep its appointment within 4 hours of the agreed time, whereas in Italy it is €30 within a 3-hour timeframe."

CEER/ERGEG Publications

Public Workshop:
Workshop on ERGEG principles: Capacity Allocation Mechanisms and Congestion Management for Gas, Wednesday, 18 February 2009.  Presentation slides now available on the website.


See all dates of Regional Initiatives meetings (RCC, IG, SG) on the ERGEG online Calendar.  Events are by invitation only, unless otherwise stated. 

Regional Initiatives Update


Electricity and Gas Regional Initiatives

The European Energy Regulators have revised their monthly reporting practices of the Regional Initiatives in order to ensure more output-based information and updates for readers, as many of the issues addressed in the regions have a medium-term perspective. 

As a result, the European Energy Regulators' Newsletter will now present Quarterly updates of the 7 electricity regions and 3 gas regions. For the months in between these quarterly updates, the activities in one region will be presented in the "Region in the Spotlight" section. This will provide readers with more in-depth coverage of each region on a regular basis, supported by the quarterly 'tour-de-table" updates.

For continued information on activities in each region, please consult the Regional Initiatives website and the region's dedicated subpages.

Region in the Spotlight - Central South electricity region 

In the Central South region, following a public consultation, the Central South REM published its Report on Transparency on 12 February 2009.

The report sets out specific steps for the improvement and harmonisation of transparency in the wholesale electricity markets of the region. For the first time, generation data and information about unavailability of consumption and generation units will be available region-wide.

The main part of the report is the list of information that should be made available to market participants, including specified definitions. The proposed definitions are for data that must be published by the TSO under the (mandatory) Congestion Management Guidelines and that are recommended to be published in ERGEG’s (voluntary) Guidelines of Good Practice on Information Management and Transparency (GGP-IMT).

The report provides for varying deadlines, taking into account the type of information required; for example information on load, transmission and interconnection, balancing, and generation.

The Report on Transparency has been based on similar reports adopted in the Regional Initiatives  - the Northern, Central West and Central East regions. The future work on transparency within the Central South region will focus on monitoring the implementation of the requirements contained in the report.

International Activities

The European energy regulators are pleased to announce that "early bird" registration for the Fourth World Forum on Electricity Regulation (WFER IV) is now open and will run until 15 May 2009. The WFER, the leading global energy regulatory conference, takes place every three years. WFER IV takes place in Athens, Greece from 18-21 October 2009.  It will address such issues as reliability and security of supply, the role of regulators in responding to climate change, competitiveness and affordability and the independence, powers, responsibilities, best practices and training of regulators. To find out more, view  the conference programme at www.worldforumiv.info.

Meanwhile, CEER continues its international work on energy cooperation.  This month CEER welcomed members of the Japanese Gas Association to Brussels. This was an occasion to share practices and policies regarding the structure of gas markets within Europe and Japan.  Meeting participants discussed the principles and impacts of market liberalisation and customer rights and protection, in particular within the context of ongoing restructuring of the Japanese gas sector.

About the European Energy Regulators' News

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European Energy Regulators' News is a free, electronic newsletter and covers the period from the previous issue to the date of publication. It is your gateway to the news from Europe’s energy regulators, press releases, public consultations, advice to the European Commission, news from the Regional Initiatives, and regulation and policy developments at a national level.

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