Questions and Answers Related to Market Liberalization
(answers were given by Mr. Erik G. Regter, SSE Commercial Director) ®ilina, 22.11.2004
SSE welcomes further market liberalization for companies, businesses and institutions.
As from January 1, 2005, the electricity market has been liberalized for all customers except for home users. This historical moment has a major effect on SSE and its customers. What can SSE offer to its customers? Our questions will be answered by Mr. Mr. Erik G. Regter, SSE Commercial Director:
What is the impact of market liberalization?
The most important effect for our customers is the division of our services into distribution activities and electricity (power) supplies. It is not effective to build a new parallel distribution network; this is why transport and distribution are still regulated. The market regulator ensures that the distribution network remains accessible to the market participants under non-discriminating conditions. It also states the fees. Although adopting the new Energy Act, important milestones have been set on the liberalized market, the adoption of secondary legislation and adjustments to regulation is still ahead of us. Based on the experience from other countries, we conclude that a liberalized market needs a definite set of professional rules for proper functioning. The challenge is to prepare the rules in the first half of 2005.
The supplies of power energy are fully liberalized, which means anybody possessing the necessary licenses is free to do the job.
What is the SSE attitude to market liberalization?
SSE welcomes market liberalization. Competition provides freedom of choice to customers. To us, the greatest challenge is in improving and extending the offer of services and products. And this is welcomed above all by our customers. We wish that our customers stay with us not because they have to, but because they want.
We strive to be clear and transparent, to stay close to our customers in the new and a bit unclear environment, much like we did over the past 80 years.
How is the above reflected in your offers to companies, businesses and institutions?
We have prepared a set of updated products for 2005, based on our long experience with energy supplies in Central Slovakia. SSE has deiced to apply an evolutionary and transparent approach to market liberalization. The new product range is clear and transparent. Its structure resembles the one which is familiar with our customers; however, the prices were adjusted in line with the liberalized market rules. What is more, since we strive to be transparent and offer full information, we have decided to include into the invoice not only the price of power energy itself, but also an indication of the fees. Our customers can have an overview of the overall price for electricity the way it used to be presented, however, supplemented by its individual items.
What else do you offer in your new products?
Of course, the liberalized market gives us the chance to offer improved, customer-oriented services and further added value.
We have introduced custom tailor made products for our biggest customers; our sales team offers individual solutions all around the Central Slovakia region.
In line with the requirements of our customers - businesses and institutions showing interest during the market research performed in October, we established a special customer call center 0850 123 555. If necessary, our staff is ready to give prompt and relevant help and information. Apart form this, we have dedicated special place for businesses and institutions in our sales offices.
What is the effect of market liberalization on companies, businesses and institutions?
Besides the possibility to select the provider, it is also important to mention that the contracts valid now will, as from January 1, 2005, not comply with the new requirements of the Energy Act. This is why we have recently sent more than 30 000 new contracts to our valid customers. Following the declared professional approach to customers, we have also enclosed the new product range, new terms and conditions and an information flyer. We would hereby like to ask our valid customers to send the contracts in by December 15, 2004.
What happens if the customer does not return the contract within the specified period?
If the customer fails to return the contract, it will not comply with the newest Energy Act. We, however, believe that our customers do not wish to enter legally muddy waters with a product as important as electric energy is.
What is going to change for the households?
Nothing. The home user marked is regulated till 2007, whereby the conditions are still defined by the market regulator. SSE will, however, keep on improving the services. We would like to persuade our home users way ahead that staying with us will be the best choice even after 2007.
Out of what you have mentioned so far, it seems that liberalization is a complex issue.
Power engineering must undergo all necessary reforms, so even the market is being transformed to a competitive one. Due to the 80-years-long history, our company has a competitive advantage in the power engineering business and the knowledge of the region. At the same time, we have the opportunity to share the insight of our strategic investor, Electricité de France, who has a firm position on the world market with energies.
