David Korody National Federation of Associations for

Consumer Protection in Hungary

To draw up the directions of challenges and opportunities have to check the concerning circumstances in the European Union in relation the energy sector

„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

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

Source : Communication

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

Source : Communication

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

Source : Communication

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

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.

Source : Communication

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)

There are two kinds of suppliers:

universal electricity suppliers and

electricity traders (both have to have licence).

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

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

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.

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

„The devil lies in the details.”

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.

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.)

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.

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.

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;”

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.

Reducing the amount of electricity consumption in the households.

Using greener products.

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

Thank you for your attention!