October 2010

Issue: October 2010

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Video interview with Lord Mogg on Energy Infrastructure and what regulators can do to ensure appropriate investment


Feature
- Competition should deliver benefits to energy customers - 3rd London Forum

Publications
- Final GGP on Indicators for
  Retail Market Monitoring for
  Electricity and Gas
- Monitoring Report 2010 on the
  regulatory oversight of natural
  gas hubs
- Press Release on new retail
   market monitoring approach

Public Consultations
-  see calendar of public consultations

Region in the Spotlight
-  3rd Package Implementation

International
-  EU-US Reguatory Roundtable

Editorial
Particularly interesting this month is ERGEG’s new retail market monitoring approach to test benefits to customers which was launched at the Citizen’s Energy Forum on 21-22 October (see feature article below on the London Forum).

Consisting of a suite of 18 indicators, these GGP on Indicators for Retail Market Montoring will provide Europe’s national regulators with a uniform basis to assess the functioning of their retail markets in line with the new monitoring obligations placed on them under the 3rd Package. Monitoring (based on this new approach) will capture in a holistic way:
• Customer satisfaction
• Retail market outcomes
• Market structure
• Market condition and Distribution System Operator services

This month we published a Monitoring Report 2010 on the regulatory oversight of natural gas hubs. It takes stock of the different oversight regimes in place and provides ERGEG’s recommendations for best practice approaches to the regulatory oversight of gas hubs.

The viEUws video interview with the CEER President, Lord Mogg, illustrates the  important role of energy regulators in Energy Infrastucture debate (e.g. regulators being a major source of analysis and assessment to ensure value for money in investment, and what regulators can do to ensure appropriate investment)

Two Factsheets - one on "smarter regulation for energy customers", and one on "the drive towards Smart Grids" - were released. Four workshops took place during October, gas balancing; ERGEG draft comitology guidelines on fundamental electricity data transparency; Framework Guideline on electricity capacity allocation and congestion management; and Draft GGP on regulatory aspects of smart metering for electricity and gas (see events).

EU and US regulators met, in Berlin, for their annual regulatory roundtable (see international section below).

In terms of the Regional Initiatives, this month we look at how two regions are adjusting so as to build focus on 3rd Package implementation.

Competition should deliver benefits to energy customers - 3rd London Forum

The 3rd Citizens' Energy Forum (“London Forum”) took place from 21-22 October 2010 in London. Chaired by the European Commission, this (annual) EU stakeholder forum brings together the national and European consumer associations; Ministries; energy regulators; and the electricity and gas industries to address customer issues.

Political relevance of the London Forum
Each year the London Forum identifies certain actions that should be taken to help energy customers benefit from Europe’s energy liberalisation and market integration policy.  As evident from the conclusions of the 3rd London Forum it relies heavily on CEER/ERGEG, in cooperation with other stakeholders, to drive forward the customer agenda in energy policy. 

Te London Forum was recently recognised politically at the Informal Energy Council meeting, 6-7 September. The Belgian Presidency has been actively promoting consumer aspects of the energy internal market, and pays tribute to the political importance of the London Citizens' Energy Forum.

Competition Should Deliver Benefits for Customers
The particular focus of the Forum this year was on the development of competitive retail markets that benefit consumers. ERGEG contributed significantly to each of the four themes (complaint handling, billing, smart metering and competitive retail energy markets that benefit customers) of the 3rd London Forum.

Monitoring Retail Markets
At the Forum, ERGEG launched its new harmonised approach to monitoring retail markets (see Press Release). Consisting of a suite of 18 indicators, it provides national regulators with a uniform basis to assess the functioning of their retail markets.

In developing the indicators ERGEG considered how customers reveal their customer satisfaction (customer complaints, enquiries), which in turn is affected by market outcomes (such as prices and choice) and ultimately driven by market structure (e.g. number of suppliers, market share and branding) and market conditions (e.g. switching, disconnection, repair and maintenance). Market  monitoring (based on this new approach) should provide key insights into the issues which may be affecting market functioning. It will help national regulators empower customers and should benefit the EU Agency for the Cooperation of Energy Regulators (ACER) in its future market monitoring duties. The Forum supported the use of these identified indicators in monitoring and reporting on how well markets function for the consumers.

ERGEG/CEER committed to publishing a benchmarking report on the roles and responsibilities of NRAs in customer empowerment and protection as of January 2011.

The European Commission (DG SANCO) presented findings of a report it carried out on the functioning of retail electricity markets for consumers in the EU. It concluded that consumers need help to better participate in the market and that measures for consumers should focus on improved provision of information, enhanced price comparison and facilitated switching and complaints handling procedures. ERGEG has already developed Guidelines of Good Practice (GGP) on switching and complaint handling. ERGEG/CEER committed to updating these GGP on switching and to developing a GGP on price comparison.

Complaint Handling
Following ERGEG’s Guidelines of Good Practice (GGP) on customer complaint handling, reporting and classification released in June 2010, the Forum invited CEER/ERGEG to report to the 2011 London Forum on the implementation of these GGP including an overview of existing statutory complaint handling standards and recommendations on how to set up these standards.

The Forum participants shared the view expressed by ERGEG that complaint/dispute bodies should be independent and not simply have autonomy within a particular company.  Regulators already have significant expertise in the area of alternative dispute mechanism with two thirds of national energy regulators already play a role either as the main body responsible for dispute settlement or shares the responsibility with other public authorities.

The Forum welcomed the Belgian Presidency’s idea to create a network of national independent energy ombudsmen, which should also be invited to participate in the London Forum. The Commission will report to the next Forum on the options chosen by the Member States to establish their dispute settlement mechanism.

Billing
The Forum welcomed ERGEG's status review on the progress towards the implementation of Good Practice Guidance for billing.

Smart Metering
ERGEG presented its draft guidelines (currently being finalised following a public consultation which ended in September) on regulatory aspects of smart metering.  These guidelines explicitly set out the services that must be rendered by DSOs, metering operators, suppliers to customers so that they actually benefit from smart metering. Recognising the need for further guidance on smart metering, the Forum invited ERGEG/CEER to develop recommendations in this regard. The Forum invited the regulators to advise the 2011 Forum on a demand/ response electricity market provided by smart meters with a focus on the respective roles for DSOs and competitive players regarding customer services offered through smart meters; and balancing and settlement arrangements that could incentivise suppliers to develop offers to customers.

CEER/ERGEG Events

Calendar of current and future public consultations