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Household costumers, a stake for competitive electricity providers

8 July 2015
Electricity
energynomics

With the decrease in the quantity of electricity supplied at regulated tariffs by 10% every six months, domestic consumer becomes interesting for operators other than those categorized as a last resort (Enel Electrica, CEZ and E.ON, each with its regional subsidiaries), said the representatives of Romanian Association of Electricity Suppliers (AFEER).

“From 1 July we have 50% competitive market component (CPC) in final energy tariff for domestic consumers, and from January 1, 2016 it will rise to 60%”, said Ion Lungu, President at AFEER.

From March 1, 2016 shall come into force enters the new electricity bill, more detailed, but still difficult to understand without specific knowledge on the part of the recipient. To facilitate the acquisition of knowledge to build a minimum of energy culture for the household client, AFEER launched a national information campaign to customers, beginning with its website.

It is still not clear what each provider will do, or if the actions of all suppliers started. The fact is that in terms of recognition of these public information costs and their inclusion in the electricity bills, this recognition amounts to no more than 1% of the cost of supply for domestic customer.

An average cost for energy supply is 1 euro per month per household customer, and represents the cost of invoicing, customer support center, issuing notices of disconnection, of payment orders and penalties, and other costs related to the relationship between merchant and customer ,said Mihai Beu, Electrica representative in AFEER. In Romania there are about 9 million households that have an electricity supply contract.

Some vendors make false promises, impossible to fulfill

AFEER representatives cautioned that there are cases when a supplier can do to domestic customers unenforceable promises into reality, and they classified these “pitfalls” in technical and contractual. The promise of reducing the final bill by 10% or more is unobtainable; a possible decrease ranges between 3 and 5%, said Ion Lungu.

“There began to appear all sorts of offers for electricity, comprising all kinds of tricks that seem to decrease the bill, but that are actually incorrect”, said Ion Lungu on tenders who say they can avoid the radio-tv, the inclusion of renewable subsidies or the cogeneration tax.

“The consumer needs to establish a relationship with the supplier; the relationship is not only in one direction. The consumer himself must open the acquisition strategy, considering what is convenient. Furthermore, the consumer can find a way to reduce the invoice value. […] A customer-oriented provider will tell his client how the bill could be reduced”, said Cristina Micu, a Management Board member at AFEER.

“From what appears in the market, we have identified the following pitfalls: firstly be explained to everyone that the supplier is not also the distributor of energy, even if often the name resembles. There are many customers who are lead to think that if they switch their supplier may have distribution problems. Unrelated issues. For large consumers, with long term relationships with competitive suppliers were no such problems. The distributor is the technical company that brings the power, the supplier is the one with whom you have a business relationship, he is the one from where your bill comes. They are however different”, said Laurențiu Urluescu, Management Board member at AFEER.

“The same, that it may influence the quality of electricity. It is false. You must note that the supply contract cannot change any technical parameter of the connection approval”, the AFEER official said.

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