September 2009

Issue: September 2009

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World Forum on Energy Regulation (WFER IV), Athens,
18- 21 October

Feature
- Empowering Consumers

Publications
- Revised GGP on Electricity Balancing Markets Integration
- Status review of the definitions of vulnerable customer, default supplier and supplier of last resort
- Status Review of DSO Unbundling with Reference to GGP on Functional and Informational Unbundling
for DSOs
- ERGEG's response to GTE+ 2010 Annual Work Programme
- ERGEG Principles: CAM and CMP for gas

Press Release:
-  Energy regulators highlight “fuzzy” distribution separation, default suppliers and suppliers of last resort

Region in the Spotlight
- Quarterly update on all regions

Editorial
The biggest news item over the summer period was that the 3rd Package (comprising 5 energy laws) was published in the Official Journal on 14th August.  Accordingly, the new Agency for Cooperation of Energy Regulators (ACER) is to be fully operational by 3 March 2011. 

The process for ACER to prepare the framework guidelines for the European TSO bodies to draft the (potentially binding) EU-wide network codes is defined in the Electricity and Gas Regulations. It was agreed at the Madrid and Florence fora (May and June) that the work will start during the interim period (i.e. before ACER is fully operational) on pilot projects, in order to learn how to make the process effective and efficient and to agree how to co-operate in practice.  Grid Connection and Access Framework Guideline, and Wind Connection Network Code is the pilot for electricity, whereas for gas it was concluded to start with Framework Guidelines and Network Codes on capacity allocation.

Following a public consultation, ERGEG has revised its 2006 Guidelines of Good Practice (GGP) on electricity balancing integration. We are currently consulting until 6th November on our draft 2010 Work Programme.

Given the Citizen’s Energy Forum (28-29 September) in London, this month’s feature article focuses on empowering consumers. ERGEG published two Status Reviews which seek to better protect energy customers and promote retail market competition. There is a clear message from ERGEG to end the “fuzzy” separation of Distribution System Operators (DSOs) from supply and to build market confidence. ERGEG also advocates complaining as complaints are an effective way of mobilizing change.

CEER held, in Berlin, a workshop on unbundling energy undertakings in relation to corporate governance principles. This month, there is a quarterly update of all regions of the Regional Initiatives.

Finally, we look forward to welcoming you at the World Forum on Energy Regulation in Athens, 18-21 October. 

Empowering Consumers

 The European regulators work to ensure retail markets function properly and to empower customers so that they have the motivation to shop around for the best deal. This is not a lone crusade by the Europe’s energy regulators. Two big developments – the 3rd Package, and Citizens Energy Forum – also act in the energy consumer’s interest.

3rd Package and Consumer Issues
A well-functioning market needs well-informed and active customers, and strong regulators. To this end, big improvements for consumers were introduced in the 3rd Package. It significantly increases consumer protection measures (including for vulnerable customers) and gives national regulators a considerably enhanced role (in terms of retail market design, a leading role and new powers for retail market monitoring and new responsibilities to contribute to better customer information and protection). ACER too will monitor retail prices and compliance with consumer rights.

Citizens Energy Forum
The European Commission established the Citizens Energy Forum in 2008. Dedicated to customer and retail market issues, this "London Forum" seeks to strengthen the role of consumer representative bodies in influencing best practice at an EU level. 

ERGEG’s latest work on consumer issues
At the second meeting of this London Forum, 29-30 September, ERGEG presented work in progress on the Regulatory Aspects of Smart Metering (to be published later this year) and on Complaint Handling. ERGEG considers complaints to give a strong signal that a market is failing consumers. ERGEG developed a set of recommendations on complaint handling for Public Consultation.  ERGEG’s message is for consumers to keep complaining, as complaints are a very effective means of mobilizing change.

This month, ERGEG published two Status Reviews which seek to better protect energy customers and promote retail market competition to the benefit of Europe’s energy customer (see Press Release, PR-09-09). In the first, ERGEG finds that supplier of last resort and default supplier are understood in many different way, and that it s usually the incumbent energy supplier who acts as both.  In an effort to promote competition, ERGEG recommends a tendering procedure for appointing a default supplier/supplier of last resort, and also time-limiting these services.

The 2003 Directives require legal and functional separation of DSOs  by July 2007.  ERGEG’s status review on DSO unbundling finds that consumers do not know yet about different separated roles of distribution and supply; consumers find identical branding for what should be separated parts of the businesses; and the separation of information is a big problem not least because the DSO and supply businesses share the same staff. It is time to end the fuzziness of roles and responsibilities and build market confidence.

CEER/ERGEG Publications

Calendar of current and future public consultations

The standard period for ERGEG public consultation is 8 weeks. For further information (including ERGEG’s newly revised public consultation guidelines) visit the public consultations section of the website.   

The 2009 Regional Initiative Conference takes place in Brussels on 17 November 2009. Participation is by invitation only.

Events

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

Regional Initiatives Update

Region in the Spotlight - quarterly update on all regions

This month all regions are in the spotlight in the Quarterly reports. The key updates are the following:
In electricity, the Baltic region published its final report on the “Balancing in the Baltic region”.  The Central-West electricity region published the regulators´ review of the regionally harmonized explicit auction rules for cross-border transmission capacity in September 2009.
In terms of long term allocation, new IFE rules entered into force in June 2009 in the South-West electricity region. The main improvements include – inter alia – a new compensation scheme in case of capacity reduction before nomination, more precise definition of long-term products and the improvement of transparency through new publications. In the France-UK-Ireland electricity region, the TSOs submitted the final set of IFA rules for approval.
Regarding the Auction Office (AO) project in the Central-South region a two-phase stepwise approach has to be followed. The first phase is an interim solution (TAO solution) with the TSOs delegating TERNA to perform the auctions and at the same time each TSO continuing to perform its strategic activities. In parallel the TSOs of the region will work on a permanent solution including the full integration with the AO of the Central-West region CASC from 2011.
In the Northern region, the suspended EMCC market coupling is expected to be re-launched this autumn. Market coupling will be launched also on the Baltic Cable a couple of months after the successful re-introduction of the market coupling between Germany and Denmark.
All the three gas Regional Initiatives undertook further steps in improving transparency in the 3rd quarter of 2009. In the North-West region, based on a previous agreement, TSOs will publish daily stocks, inputs and outputs data at all major storage facilities, on an aggregated basis across eight hub areas. In the South region work focused on improving transparency at LNG terminals through implementing the GGP LNG provisions and analyzing monitoring results.
Regarding capacity allocation and congestion management, work continued in the South region on the Open Subscription Period to allocate available existing and under construction capacity at the Larrau interconnection in a coordinated way between France and Spain. Important efforts have been made to streamline the work on capacity in the North-West region through re-structuring seven capacity projects down to three. Additionally two of the original projects have been completed (on the French-German and French-Belgian borders). In the South-South East region work on the harmonization of nomination and re-nomination lead times has been carried forward in order to allow adjacent TSOs to apply congestion management procedures in a consistent way.
During the last quarter work continued also on investment in new infrastructure projects. In the North-West region, in order to improve the regional investment climate, investment principles have been consulted upon and further steps towards a regional framework have been agreed. In the South region the key investment projects are two coordinated Open Seasons to assess market needs for new interconnection capacity and allocate this new capacity between France and Spain.

International Activities

 See the programme of the upcoming World Forum on Energy Regulation IV, from 18-21 October on www.worldforumiv.info.

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