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Eurogas
CONSUMER PROTECTION & SWITCHING IN THE DOMESTIC GAS
MARKET
ERGEG Customer Focus Group WorkshopHelsinki
11th October 2005
Introduction
Eurogas represents the interests of the natural gas industry in 21 countries. Membership is open to national federations and individual gas companies.
Spring 2002:Gas Suppliers’ Group establishedfocus on issues of concern to suppliers, specifically those associated with the introduction of competition.
The content of this presentation is based largely on the work of this group over the past 3 years.
Autumn 2005: New structure for Eurogas groups is being introduced, and the GSG work will be continued under a new group, the Supply & Market Development Committee.
Domestic (household) competition
Successful retail competition requires:
Efficient, smooth customer switching– Eurogas review of customer switching processes
Availability of consumer information– Eurogas consideration of provision of information, including
price comparisons
Consumer protection– Eurogas Position Paper on Direct Selling
1. Efficient, smooth customer switching
Eurogas review of customer switching processes
Focus on the domestic (household) market
Identified:
Key principles Main stages of switching process Approaches in different Member States
Key Switching Principles
Maximising customer satisfaction/minimising confusion
Effective mechanisms for controlling poor sales practices
Minimising rejections, errors and process problems
Fair and transparent procedures for process changes/improvements
Switching process to be non-discriminatory and pro-competitive
The Switching Process
Main stages: Contract Verification [Objection] Processing Meter Reading
Despite these common elements, models vary from country to country variations due to structural differences in industry
organisation
Speed of transfer balanced by need for process controls
Switching Models
Seeking to impose standardisation where systems are already (being) developed is not justified
But: helpful if customer experience at Member State level is
as far as possible similar for gas and electricity
helpful if systems over time can converge
helpful if modules can be identified to facilitate convergence
Critical success factors for customer switching
Successful customer switching not just on the switching model, but also on:
Robust service level agreements, in particular with DSO
High quality industry data
Properly managed industry dataflows
Acceptable transfer meter readings– differences between domestic and non-domestic markets
2. Availability of Consumer Information
Eurogas also recognises the importance of:
Fair statements concerning price savings, and fair price comparisons– Standard methodology
Simple clear billing– Not critical to show network charges and gas prices
separately
Independent and impartial websites– Accreditation of sites
3. Consumer Protection
The interests of domestic consumer, particularly vulnerable consumers, are best safeguarded by:
Competitive pricing
Protection against misselling
Clear communications, both as regards prices but also switching process, transfer date etc.
Dispute settlement
Importance of dialogue with industry in the development of appropriate safeguards
Eurogas Position Paper on Direct Selling
Position Paper on Direct Selling to Household Customers emphasised importance of :
– Responsible selling, particularly where vulnerable customers involved
– Clear information regarding services offered, prices, contractual conditions
– Gas suppliers should act promptly when problems arise
Conclusions
Customer interest closely aligned with that of suppliers
Switching processes– simple, efficient and as cheap as possible to operate– speed of transfer balanced by proper process controls– processes to be reviewed in light of experience
Consumer information– Ensure price comparisons not misleading– Standard methodology
Customer protection– Sales and marketing– Vulnerable customers
If full benefits of competition to be realised, industry and regulator must work in partnership to ensure these issues are addressed appropriately
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