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David Korody nfacph hungary


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Challenges and opportunities for Consumers in the open Electricity Market

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David Korody nfacph hungary

  1. 1. David Korody National Federation of Associations for Consumer Protection in Hungary
  2. 2. To draw up the directions of challenges and opportunities  have to check the concerning circumstances in the European Union in relation the energy sector
  3. 3. „Energy prices and costs in Europe”  COM (2014) 21  Communication from the Commission to the European Parliament, The Council, The European Economic and Social Committee and the Committe of The Regions (Date: 22.01.2014.)  Hereinafter: Communication
  4. 4. „The liberalisation of the market is expected to deliver more competition and therefore more efficient and cheaper energy.” Source : Communication
  5. 5.  European consumers’ electricity prices have risen and are still rising.  There are great differences in national prices:  consumers in the highest priced Member States are paying 2.5 to 4 times as much as those in the lowest priced Member States. Source : Communication
  6. 6. Source : Communication
  7. 7.  There is a great gap between the highest and lowest prices.  In the EU on average, household electricity prices have risen 4 %.  Electricity network costs went up by 18.5 % for households.  Sum of taxes and levies are risen with 36 %. Source : Communication
  8. 8. Source : Communication
  9. 9.  Costs are likely to increase up to 2020, specially for electricity.  Reasons:  rising fossil fuel costs,  necessary investment in infrastructure and generation capacity. Source : Communication
  10. 10.  Electricity can be bought from the trader, who sells it for the best price.  Because of the rising prices, consciousness is very important.  In order to get the best deal, continous monitoring is needed in relation with the suppliers, their prices and their contractual terms.
  11. 11. Source : Communication
  12. 12.  There are a lot of elements which are parts of the price. If the consumer do not read the contractual terms completely, gather not enough information  can get annoying surprise (especially in the open market – in the case of buying from an electricity trader)
  13. 13.  There are two kinds of suppliers:  universal electricity suppliers and  electricity traders (both have to have licence).
  14. 14.  Prices of universal supplies are determined in very strict law rules  are under the control of the Hungarian Energy and Public Utility Regulatory Authority (HEPURA)  Only the maximum price are indicated in Hungarian Law their must be equal or lower
  15. 15.  Main difference:  Prices depend on only the circumstances of the market.  There are less strict rules in relation with customer services  electricity trader has more independence in field of providing services than universal suppliers
  16. 16.  There are differences in the prices   Before mentioned continous, conscious behaviour and monitoring is needed.  Prices of universal suppliers are regularly published on the HEPURA’s webpage (four times in a year).  Consumers should check it in order to be able to compare the prices with the currents of electricity supplied by the traders.
  17. 17.  On the webpage of HEPURA there are the contacts of electricity traders also  the prices can be set together by checking their webpages
  18. 18. „The devil lies in the details.”
  19. 19.  All costs and fees are in the contracts and in the contractual terms  for the consumer they are „hidden terms”  can causes „hidden costs” if they are not read and understood  „Hidden” is a subjective category in this case.
  20. 20.  It is prohibited for both kind of supplier to charge any fee for those services which are in relation with changing a supplier!  For example: giving out datas relating to previous service (billing information, reading of the meter, etc.)
  21. 21.  Universal electricity suppliers had to reduce their costs and prices by 10 % in their bills according to the rules of Hungarian Law about Reducing Overhead Expenses (2013).  This rule is not appy in relation with the electricity traders.
  22. 22.  Universal suppliers: 4.  Electricity traders: 159.  In spite of the bigger number of traders, we can say: there is no real competition between suppliers and traders if we are looking it from the household customer’s side.
  23. 23.  DIRECTIVE 2009/72/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC:  „Household customer’ means a customer purchasing electricity for his own household consumption, excluding commercial or professional activities;”
  24. 24.  Usually the prices of the universal suppliers are cheaper than electricity traders’ prices.  In relation with consciousness: many household customers do not know about their right that they can buy electricity from any trader.
  25. 25.  Reducing the amount of electricity consumption in the households.  Using greener products.
  26. 26.  Every time, there can be a dispute between the consumer and the supplier.  These disputes can be solved easily by the ADR-bodies.  Alternative dispute resolution: fast, cheap, simple process awareness in relation with ADR-entities has to be strengthened
  27. 27. Thank you for your attention!