Challenges and opportunities for Consumers in the open Electricity Market

1. David Korody
National Federation of Associations for
Consumer Protection in Hungary

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. „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. „The liberalisation of the
market is expected to
deliver more competition
and therefore more efficient
and cheaper energy.”
Source : Communication

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. Source : Communication

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. Source : Communication

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.  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. Source : Communication

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.  There are two kinds of suppliers:
 universal electricity suppliers and
 electricity traders (both have to have
licence).

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.  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.  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.  On the webpage of HEPURA there are the
contacts of electricity traders also  the prices
can be set together by checking their
webpages

18. „The devil lies in the details.”

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.  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.  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.  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.  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.  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.  Reducing the amount of electricity
consumption in the households.
 Using greener products.

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. Thank you for your attention!