October 2010


European Energy Regulators’ News

Issue: October 2010

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

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

- 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

-  EU-US Reguatory Roundtable

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.

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.


Press Release:
•  Regulators’ new market monitoring approach to test benefits to customers launched today at the
    London Forum, (22 October 2010)
•  Final Guidelines of Good Practice on indicators for retail market monitoring for electricity and gas
   (Ref. E10-RMF-27-03)
•  FactSheet on smarter regulation for energy customers
   (Ref. FS-10-02)
•  FactSheet on the drive towards smart grids
   (Ref. FS-10-01)
•  Monitoring report 2010 on the regulatory oversight of natural gas hubs
   (Ref. E10-GMM-11-03)

 (see Events section of website for the new calendar of next workshops) :

Calendar of current and future public consultations

Area Issue Consultation
publication date
Gas Existing transparency requirements for natural gas Oct - Nov 2010
  Framework guideline on gas transmission tariffs TBD
Electricity Framework guideline on capacity allocation and congestion management for electricity Sep - Nov 2010
  Framework guideline on operational security / system operation TBD
Cross Sectoral CEER 2011 Work Programme Sep - Nov 2010
  CEER response on interdependencies with other markets TBD

The standard period for ERGEG public consultation is 8 weeks. See the public consultations section of the website.   


See all dates of Regional Initiatives meetings (RCC, IG, SG) on the ERGEG online Calendar.  

Regional Initiatives Update


Region in the Spotlight - 3rd Package Implementation

The 3rd Energy Package changes the context in which the ERGEG Regional Initiatives operate. In particular, the implementation of legally binding network codes and the obligation placed on national regulatory authorities (NRAs) to cooperate, including through the Agency for the Cooperation of Energy Regulators (ACER), will require more formal arrangements than previously necessary.

In June the  regulators of the North-West  gas region published the road map “GRI North-West: The next steps following the adoption of the 3rd Energy Package”. which considers the changed role and organisation of the region. It gives thought to how work within the North-West gas region could be organised in the light of the implementation of the 3rd Energy Package.

The document proposes that the GRI NW more clearly identifies "implementation work" as distinct from the "pro-active work" it has undertaken so far; it reforms the way the RCC functions, reinforces the role of the Programme Board and integrates Member State governments more centrally into its processes. In respect of the work plan, the document proposes that a relatively narrow set of projects be undertaken. With regard to pro-active projects, this should include continuing the work on investment and short-term capacity. In the context of implementation it is suggested that the GRI NW volunteers to assist ERGEG and ACER through the practical development of appropriate arrangements for co-ordination of implementation at regional level.
In addition the North-West region is organising – following the request of the Member States – “pre-comitology” meetings in order to understand the impact of framework guidelines and network codes on national energy markets in advance.

Since June the lead regulator, NMA, has been conducting a road show across the region to soliciting feedback from key stakeholders on this roadmap approach.  It has been discussed  in open dialogue with Member States and TSOs at the Implementation Group meeting of 21 September in preparation of the more general stakeholder meeting on 26 November.

The South gas region, too, is working on defining the region’s role in the light of the 3rd Energy Package Focusing on the implementation of Regulation 715/2009, the region's regulators are planning a pilot project to test ERGEG's pilot Framework Guidelines on Capacity Allocation Mechanisms (CAMs) for short-term capacity at the borders. They are also planning a pilot project to test ERGEG’s recommendations for Congestion Management Procedures (CMPs) comitology guidelines at the borders. On this issue, regulators have started to analyse CMPs currently in force at interconnections with the aim of establishing objectives and an action plan.

International Activities

The 8th EU-US Energy Regulators Roundtable took place in Berlin, from 26- 27 October 2010 (see presentations and closing statement). Regulators gathered to discuss recent regulatory developments in the EU and US and their collaboration in the framework of the International Confederation of Energy Regulators.  Specific themes addressed included cross-border transmission planning; energy efficiency; transparency; and security of supply.

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