The  impact  of  separated  branding  of  incumbent  energy  utilities  on  the    

activity  of  energy  markets      

A  Consideration  of  Global  Empirical  Evidence  and  implications  for  Ireland  

   

A  white  paper  by  Dr  Philip  E.  Lewis  VaasaETT  Global  Energy  Think-­‐Tank,  Finland  

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Contents    Executive  Summary…………………………………….………………..…….3    Relating  Separated  Branding  to  Switching…………………..………7    About  the  Utility  Customer  Switching  Research  Project……..22    References………………………………………………………………………….23    About  the  VaasaETT  Global  Energy  Think-­‐Tank…………………..25  

 Publication  Date:  September  26,  2010  ©2010  VaasaETT  

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Executive  Summary    The  Irish  Energy  regulatory  authority  CER  is  contemplating  mandating  the  extensive  re-­‐branding  of  the  two  leading  incumbent  utilities  in  Ireland,  namely  Bordgais  (for  gas)  and  ESB  for  Electricity.      Both  companies  are  former  integrated  utilities  that  have  since  been  legally  unbundled,  but  both  remain  ownership  bundled  companies.  Both  companies  have  furthermore  re-­‐branded   to   the   extent   that   the   retail   (supply)   element   of   the   business   is   identifiable  (from  the  name)  and  thus  differentiated  from  the  non-­‐competitive  (liberalised)  part  of  the  business.      During   the   past   18   months,   the   liberalised   Irish   residential   electricity   market   has  become  the  second  most  active  electricity  market  in  the  world  when  measured  in  terms  of  levels  of  customer  switching.  Bordgais  Energy  Supply,  has  won  most  of  the  switchers  from  the  Incumbent  branded  ESB,  in  fact  never  before  has  such  a  large  proportion  of  an  electricity  market  customer  base  been  won  by  a  single  competitor  in  such  a  short  period  of  time.    Separated  Branding  and  Separative  Re-­‐Branding    Two   brands   such   those   of   an   electricity   or   gas   distribution   company   (DNO)   are  considered  Separated   if   there   is   no   visually   identifiable   link  between   the   two  brands,  from   the   perspective   of   the   customer.   It   is   possible   that   the   two   identities   may  otherwise   be   linked,   through   ownership   or   behind-­‐the-­‐scenes   partnership,   but   this   is  generally  not  perceivable  to  customers.  Separative  Re-­‐Branding  is  the  process  by  which  Separated  Branding  occurs.    Purpose  of  Separative  Re-­‐Branding    Despite   the   switching   successes   in   the   market,   CER   believes   that   in   the   interest   of  continued   competition   in   the   electricity   market,   in   the   interest   of   similarly   active  competition  during  the  forthcoming  liberalisation  of  the  gas  market,    and  in  the  interest  of  fair  competition  opportunities  for  new  entrants  in  both  markets,  Separated  Branding  should  exist  so  that  customer  switching  inertia  and  incumbent  competitive  advantage  is  avoided  in  the  market.  More  specifically,  it  is  thought  necessary  that  customers  should  neither   confuse   retailers   with   distributors,   nor   favour   incumbent   retailers   over   new  entrants  simply  because  of  the  similarity  of  the  brand.    The   argument   in   favour   of   separative   re-­‐branding   has   long-­‐been   documented   (e.g.  ERGEG  2005,  Lewis  et.  al.  2004),  but  he  main  purpose  of  differentiated  re-­‐branding   in  deregulated  electricity  markets  is  to    enable    the  onset  of  switching  momentum  in  the  market  in  the  early  stages  of  competition.    

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At   this   point   in  market   liberalisation   process,   customer   awareness   tends   to   be   low,   and  customers  may  be  prevented   from  switching   retailer  at   least  partly  because   they  do  not  know  what  they  are  switching.  They  often  feel  that  switching  will  also  involve  changing  to  a  new   provider   of   distribution   (including   safety)   related   services   since   they   do   not   know  which  services  are  the  responsibility  of  which  business.  They  typically  do  not  even  know,  prior   to   being   approached   to   switch,   that   there   are   two   businesses,   and  when   told   the  industry   appears   complicated   and   confusing.   They   are   inany   case   mostly   quite   dis-­‐interested  to  find  out  more.  The  industry  is  not  of  much  interest  to  them.  It  can  therefore  be  difficult  to  explain  to  customers    what  changing  retailer  actually    means  to  them,  what  they   will   be   giving   up   and   what   will   remain   the   same   after   the   switch.   Retailers   often  counteract  this  by  for  instance  telling  the  customer  that  nothing  changes  except  the  price  and  the  customer  service.      Separative  Re-­‐Branding  in  Global  Liberalised  Energy  Markets    As  detailed  in  the  following  table,  at  least  8  energy  markets  in  the  world  have  experienced  separative   re-­‐branding,   but   only   in   one   of   them,   Belgium’s   Wallonia,   has   it   been  mandatory,  and  only  in  three  has  it  occurred  post-­‐liberalization.      The  relance  of  Separative  Re-­‐Branding  for  the  Irish  Energy  Market    CER  has  been  extremely  successful  at  inducing  competition  into  the  Irish  electricity  market.  Through  it  control  on  pricing,  the  timing  of  its  actions  and  its  foresight  into  the  dynamics  of  the   competitive   situation   in   Ireland.   It   is   natural   and   important   next   step   for   CER   to  consider   and   if   possible   remove   all   remaining   barriers   to   competition   in   time   for  competition  in  the  gas  market.    In  the  case  of  the  separative  re-­‐branding  however,  there  is  simply  not  empirical  evidence  to  support  such  a  move.  Research  conducted  for  this  report,  as  explained  in  the  following  chapters,   would   in   fact   indicate   that   there   is   no   significant   correlation   between   the  existence   of   separated   branding   and   the   level   of   activity   (measured   in   terms   of  competition)  in  liberalised  electricity  markets  around  the  world.  The  dynamics  and  reasons  are   compex,   as   explained   in   the   report,   but   put   simply,   there   are   markets   that   have  separated  branding   that   are   very   active,   just   as   those   (including   also   the   Irish   electricity  market)  which  are  not.  In  any  case  when  exploring  the  explanations  for  switching  in  any  of  these  markets,   the   role   of   re-­‐branding   has   apparently   typically   at   best   been   very   small.  Anecdotal  evidence  does  indicate  that  brand  separation  and  brand  quality  may  impact  to  a  small   extent   on   customer   loyalty   and   switching,   but   only   within   the   context   of   a   large  number  of  other,  often  much  more  significant  determinants.      For   instance,   the   most   active   market   in   the   world,   Victoria   in   Australia,   has   not   had  significant   re-­‐branding   since  before  deregulation.  Other   far   less  active  markets  have  had  substantially  more  post-­‐deregulation  re-­‐branding.    

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Incidence  of  separative  re-­‐branding  in  liberalised  electricity  and  gas  markets  Source:  VaasaETT  2010  

The   second   and   third  most   active  markets   in   the   world,   Ireland   and   Great   Britain,   have  achieved  high  levels  of  switching  without  any  significant  re-­‐branding  (in  the  case  of  Ireland)  or  without  the  re-­‐branding  necessarily  separating  distributors  from  retailers   in  the  eyes  of  the   customer   (in   the   case   of   Great   Britain).   Ireland’s   deregulated   electricity   market   has    furthermore   achieved   one   of   the   highest   and   fastest   increasing   levels   of   switching   of   all  time,  without  separative  re-­‐branding  having  taken  place  at  all.      It   has   also   been   seen   that   incumbent   brands   should   not   necessarily   be   regarded   as   an  advantage  for  those  who  own  them.  The  negative  image  of  the  energy  industry  as  a  whole  often  means  that  other  competitors  in  the  market  are  actually  at  an  advantage  by  having  a  fresh  new  brand  and  any  change  of  brand  of   the   incumbent  may  confuse  customers  who  otherwise  would  be  prepared  to  switch  to  the  competitors  (e.g.  new  entrant  retailers).    It  is  also  argued  that  the  need  for  separative  re-­‐branding  in  the  Irish  electricity  market  will  have  passed  by  the  time  price  controls  are  lifted  in  the  electricity  market.  At  least  40%  of  all  customers  will   have   switched   supplier  at   least  once,   and   some  will   have   switched   two  or  more  times.  Since  global  full  market  deregulation  commenced  around  the  world  nearly  20  years  ago,  there  is  so  far  no  record  of  any  market,  anywhere  in  the  world,  where  more  than  60%  of  customers  have  switched  supplier.    

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This  would  appear  to   indicate  that  up  to  40%  (though  probably  somewhat   less)  of  customers  are  unlikely  to  ever  switch,  even  in  the  most  mature,  active,  unbundled  and  re-­‐branded  of  energy  markets.  This  would  mean  that    in  Ireland,  by  the  time  of  re-­‐branding,  up  to  66%  of  switchable  customers,  would  have  already  switched.  For  such   customers   differentiated   re-­‐branding   no-­‐longer   has   any   purpose,   since   they  have   already   demonstrated   their   confidence   to   switch   away   from   the   incumbent,  brand-­‐bundled  utility.    Since   gas   customers   are   also   electricity   customers,   similar   proportions   of   gas  customers   would   already   be   pre-­‐disposed   to   switching   retailer   even   before   the  market  deregulated.      Based  on  anecdotal  statements  of  similar  excercises  in  other  markets,  the  cost  of  re-­‐branding   is   likely   to  cost  at  at   least  €8-­‐12  per  electricity/gas   customer.  Given   that  the  customer,  who  will  ultimately  pay  the  costs,  will  perceive  no  benefit  from  such  an  expense,  there  is  a  liklihood  that  customer  loyalty  will  diminish  along  with  their  respect   for   the   industry,   which   in   turn   could   make   it   more   difficult   for   energy  companies   to   offer   added   value   services   infuture   (such   as   home   energy  management,   demand   response   or   other   environmental   protection   related  services).   Reduced   loyalty   (as   oposed   to   opportunistic   switching   for   better   offers)  would   furthermore   result   in   unnecessarily   increased   churn   (churn   that   does   not  derrive   additional   benefits   for   customers)   and   thus   excessive   churn   related   costs  (which  would  also  be  ultimately  passed  onto  customers).  Goodwill  built  up  through  the  brand  value  would  also  need   to  be   removed   from   the  balance   sheet  of   those  companies  that  changed  their  brand.      Customer  satisfaction  would  also  be  expected  to  temporarily  decrease  as  the  sector  would  become  inward  looking  for  a  while,  busy  with  internal  new  procedures,  new  brands,  new  communication   themes  etc.   The   clarity  of   the   single  point  of   contact  would  be  diminished.    Given   the   limited   proven   benefits   of   separative   re-­‐branding   vs   the   high   costs  involved   in   re-­‐branding;   given   the   potential   risks   of   re-­‐branding;   and   given   the  success   of   the   Irish   market   formula   to   date,   it   would   seem   to   be   unnecessary,  inefficient  and  potentially   risky  to  mandate  something  that  has  never  before  been  mandated  in  this  manner,  anywhere  in  the  world.      This  report  illustrates,  with  national  case  studies,  and  through  (mostly  anonymous)  expert  interviews  the  reasoning  behind  this  argumentation.  

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Relating  Separated  Branding  to  Switching    Switching  levels  and  trends  around  the  world  have  been  well  documented.  The  three  most  active  markets   in  the  world   in  2009  were  Victoria  (Australia),   Ireland  and  Great  Britain.  The  top  11  markets  additionally  included  three  other  Australian  markets,  New  Zealand,  Texas,  The  Netherlands,  Sweden  and  Belgium’s  Wallonia.  In  addition  to  these  there   are   only   seven  markets   (all   in   Europe)   that   could   be   thought   of   as   active.   All  other  markets  are  considered  only  slightly  active  or  even  inactive  (dormant).    By   looking   at   the   re-­‐branding   that   has   taken   place   in   these   market,   in   light   of   the  switching   trends   and   activity   that   has   taken   place   in   each   case   since   those  markets  opened  to  competition,  it  is  possible  to  draw  some  empirical  conclusions  regarding  the  relationship   between   separation   re-­‐branding   and   customer   switching,   and   therefore  levels  of  market  competition.  

2009  Worldwide  Energy  Customer  Switching  Level  Rankings  Source:  World  Energy  Retail  Market  Rankings  Report  2010,  VaasaETT  Global  Energy  Think-­‐Tank.  See:  www.utilty-­‐customer-­‐switching.com  

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    2009  Worldwide  Energy  Customer  Switching  Level  Rankings  

Source:  World  Energy  Retail  Market  Rankings  Report  2010,  VaasaETT  Global  Energy  Think-­‐Tank.  See:  www.utilty-­‐customer-­‐switching.com  

No  Switching  Determinants  Dominate    Regardless   of   the   country   concened,   it   should   be   noted   that   there   dozens   of  determinants   of   customer   switching   and   loyalty.   Any   one   determinant,   however  significant,  thus  plays  a  relatively  small  role  in  the  larger  picture.      Furthermore,   when   looking   at   the   the   largest   ever   recorded   cases   of   customer  switching,  the  role  played  by  branding  has  not  been  at  the  forefront.      One   of   the   largest   single   switching   incidents   for  instance,   followed   a   price   rise   by   British   Gas   (an  incumbent   for   gas   but   not   for   electricity)   in   Great  Britain.   One   of   the   leading   competitors   and   an  incumbent   for   electricity   (but   not   gas)   used   very  powerful   timely   marketing,   subsequently   obtaining   an  estimated   600.000   or   more   customers   within  approximately   one   month.   Other   switching   incidents  have  related  to  a  wide  range  of  other  triggers  including  director’s   salaries,   utility   profit   announcements,   billing  and  CRM  system  failures,  to  name  but  some.  The    news  media   has   furthermore   often   been   an   important  catalyst  for  change.    

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Incumbent  Brands  are  Not  Always  Incumbent  Advantages    While   incumbent   utility   brands   are   often  thought  of   as   a   source  of   customer   loyalty   and  switching   inertia,   they   can   often   represent   the  oposite.        Many   incumbent  utilities  are  perceived  by  their  customers   and   indeed   the   general   public,   as  greedy,   inefficient   fat-­‐cat   monopolies,   out   of  date  and  out  of  touch  with  customer  needs.    They  are  often  seen  as  presiding  over  a  one-­‐way  dictatorial  relationhip.      They  are  rarely  seen  as  exciting,  fun,  fresh  or  cool  brands,  though  they  may  be  seen  as  familiar,  safe,  expert  and  trustworthy  brands.  

 It   is  because  of  such   images   that  new  fresh   brands   of   new   entrants   often  win  substantial  numbers  of  customers  from   established   incumbent   utility  brands.  This  has  for  instance  been  the  case  in  countries  such  as  Australia,  The  Netherlands,   The  Nordic   Coutries   and  Slovenia.      It  is  therefore  too  simplistic  to  assume  that   separated   incumbent   retailer   re-­‐branding   is  necessarily   a  pre-­‐requitise  for   increased   customer   switching   and  competitive  activity.    Even   in   markets   where   incumbent  

brands   have   won   large   numbers   of   customers,   such   as   in   Ireland,   the   winning  marketing  formular  appears  to  have  been  less  about  the  incumbent  familiarity  of  the  brand  and  more  about   the   imagery,  slogans,  messages  and  channels  used  within   the  marketing  mix.    This  is  not  to  say  that  the  brand  was  not  important,  on  the  contrary,  but  the   brand   was   built   not   only  through  the  history  of   incumbance,  but  essentially  through  outstanding  marketing   campaigning   backed   by  quality   service   processes   and  initiatives.        

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 Australia    Australia  is  the  most  active  market  in  the  world  in  terms  of  customer  switching   with   both   electricity   and   gas   markets.   According   to   the  VaasaETT   Utility   Customer   Switching   Research   Project’s   findings,  through   direct   cooperation   with   the   Australian   energy   retailers,  Victoria   for   instance  had  a  customer  switching   rate  of  26.3%   for  gas  and  electricity  (combined  average)  in  2009  driven  by  the  twelve  or  so  retailers  active   in  that  market.  This  was  the  highest   level  of  calendar  year   residential   and   aggregated*   customer   switching   ever   recorded  for  an  electricity  or  gas  market,  anywhere  in  the  world**.    Victoria  is  in  fact  the  most  consistent  highly  active  market  in  the  world.  It  stands  alone  as  the  only  market  to  have  maintained  a  level  of  annualised  switching  at  or  above  20%  for  the  past  five  years.  With  the  exception  of  Great  Britain,  all  other  active  markets   in  the  world  have  historically   fluctuated  substantially   in  terms  of  activity.   Some   have   risen   promisingly   only   to   die   out.   Others   come   and   go.  Victoria   has   maintained   permanent   competitive   opportunities   and   pressures.  Ireland  has  so  far  had  a  level  of  switching  above  20%  for  less  than  two  years  and  it  is  yet  to  be  seen  if  the  momentum  will  continue.  

*Important  Note:  These  trends  illustrate  aggregated  (residential  plus  commercial)  switch  rates.  All  quarterly  values  have  been  annualized.  **In  2007  slightly  higher  rates  were  recorded  in  Victoria,  but  that  was  based  on  NEMMCO  data,  which  is  believed  to  overstate  switching  levels  by  approximately  2-­‐3%  compared  to  SwitchstatsAustralia  data  (due  to  methodological  and  definitional  differences).  When  this  is  taken  into  account  the  2009  Victoria  switching  levels  are  higher  than  the  2007  levels.  

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For  any  market  with  aspirations  of  long-­‐term  competitiveness,  Australia  is  therefore  undoubtedly   the  world  best  benchmark,  as  well   as   the   ideal  place   to  observe   the  dynamics   of   active   customer   swithing.   Since   Australia   is   also   a   market   that   has  experienced   extensive   re-­‐branding,   it   is   also   an   excellent   place   to   observe   the  impacts   that   re-­‐branding   has   on   levels   of   switching   and   and   activity   in   electricity  and  gas  markets.      

Rebranding  in  Australia    According   to   David   Lipshut,   one   of   the   leading   achitects   of   the   Australian  restructuring,      “there  is  usually  great  value  in  a  brand.    Therefore,  a  known  brand  for  a  combined  distributor/retailer  is  usually  passed  to  the  retailer,  often  as  part  of  the  sale.  There  have  however  been  exceptions  in  Australia  and  re-­‐branding  has  generally  not  been  sen  as  an  issue”.       David  Lipshut,  Energy  Reform  Consulting  Pty  Ltd  

Australian  Switching  Trends  Compared  2002-­‐2009  Source:  World  Energy  Retail  Market  Rankings  Report  2010,  VaasaETT  Global  Energy  Think-­‐Tank.  See:  www.utilty-­‐customer-­‐switching.com  Note:  Vic  =  Victoria;  NSW  =  New  South  Wales;  SA  =  South  Australia;  QLD  =  Queensland.  All  other  states  are  not  yet  liberalised.    

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Queensland    In  Queensland   the   two   state  owned   integrated   retailers/distributors,   Energex  and  Ergon,  were   re-­‐structured.   In  2007  Energex  was   split   into  a  DNO   (distributor)  and  two  retailers  named  Sun  Retail  and  Power  Direct.  Power  Direct’s  customer  base  was  formed  through  the  transfer  of  Ergon  Energy  plus  incumbent  customers.  These  two  retailing   businesses   were   then   sold.   In   the   sell   off   two   of   the   leading   Australian  utilities,  AGL  and  Origin  acquired  Power  Direct  and  Sun  Retail  respectively.  Neither  of   the   acquired   retailers   were   considered   to   have   any   major   value   as   brands  (although  Power  Direct  was  considered  the  more  known)  since  they  were  so  new,  so   AGL   and   Origin   voluntarily   replaced   those   brands   with   their   own   brands.   The  existing   names   were   kept   by   the     distributors   Energex   and   Ergon   who   remained  state  owned.    This   re-­‐branding,   which   was   conducted   well   before   the   onset   of   full   retail  competition   (FRC),   is   not   thought   to  have  hindered   future   switching   levels   in   any  significant   way   since   both   AGL   and   Origin   were   known   brands   and   had   time   to  establish   themselves   with   their   acquired   customer   bases.   However,   when   FRC  commenced,  switching   levels   rose  extremely   rapidly,   switching   that  was   rooted   in  extensive  new  market  entry,  good  customer  awareness,  price  savings  /   incentives,  media  encouragement,  lifestyle  offerings,  aggressive  (and  quality  and  experienced)  marketing   and   various   structural   issues,   rather   than   due   to   differences   or   prior  changes  in  branding.    South  Australia  The  incumbent  distributor  and  retailer,  ETSA  utilities  was  privatised  in  1999.  In  2000  the  company  who  had  bought  ETSA,  retained  the  networks  (under  the  brand  ETSA)  but  sold  off   the  retail  division   (ETSA  Power)   to  AGL  who  subsequently   re-­‐branded  the  retail  business  as  AGL  South  Australia.    Following  FRC  in  2003  a  price  shock  led  to  large  scale  switching,  fuelled  by  customer  dissatisfaction  and  a  belief  that  the  price  shock  was  a  result  of  privatisation  /  FRC.  As   in   the   other   Australian   markets   this   switching   was   additionally   promoted   by  extensive  new  market  entry  leading  to  a  market  with  11  competitors  such  as  Simply  Energy  and  Red  Energy  who  proceeded   to  win   substantial   numbers  of   incumbent  customers,  thus  reducing  market  concentration  to  the  point  where  only  around  half  of  all  customers  remained  with  AGL.  Additional  reasons  for  the  switching  were  good  customer   awareness,   price   savings   /   incentives,   media   encouragement,   lifestyle  offerings,   aggressive   marketing   and   various   structural   issues.   Without   the   price  shock,  this  market  is  likely,  however  to  have  experienced  lower  switching  levels.    In   the   context   of   the   South   Australian   switching   dynamics,   the   impact   of   brand  changes  appears  to  have  been  at  best  small,  and  although  it  could  be  argued  that  incumbent   brand   image   shortfalls   (public   dissatisfaction   with   incumbent   utilities)  may  have  reduced  switching  inertia,  there  is  no  aparent  substantiated  evidence  to  support  this  claim.    

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New  South  Wales:  (No-­‐Re-­‐branding)  In  New  South  Wales  three  incumbent  structurally  unbundled  state  owned  retailers  dominate,  namely   Integral  Energy,  Energy  Australia  and  Country  Energy,  although  nine  other  retailers  are  also  active  in  the  market.      This  market  has  so  far  not  experienced  retail  re-­‐branding,  but  privatisation  is  now  planned   for   all   three   incumbent   retailers.   The   corresponding   network   busineses  are   not   for   sale   and   may   be   required   to   re-­‐brand.   It   is   expected   though   that  whichever   companies   acquire   the   three   retailers,   they   are   unlikely   to   re-­‐brand  them,  since  they  all  have  strong  existing  brand  value.        New   South   Wales   has   experienced   slightly   lower   switching   levels   than   South  Australia,  Queensland  and  especially  Victoria,  but  this  can  largely  be  explained  by  New  South  Wales’  price  caps  which  have  been  lower  than  the  other  states,  leading  to  smaller  savings  potentials.      The  strong  brands  of   the   incumbents  have  clearly  also  prevented  higher   levels  of  switching   away   from   the   incumbents,   but   only   because   those   brands   have  represented   relatively   satisfied  customers  who   feel   that   they  have   less   reason  or  desire  to  switch  retailer.  It  is  believed  that  to  change  the  incumbent  brands  at  this  point  might   lead   to   switching   through   confusion   and  would   punish   the   years   of  service   improvement   and   loyalty-­‐developement   that   backs   up   those   respected  brands.    According  to  David  Lipshut  “the  incumbents  are  well  regarded”.        Victoria  In  Victoria,  privatisation  originally  happended  in  the  1990’s.  The  distribution  sector  was   sold  with   retail   attached.   There  were   five   distributors   at   that   time  which   all  remain  today.  Most  then  separately  sold  off  their  retail  divisions  to  AGL,  Origin  and  TXU  prior  to  FRC  in  2002.  TXU    was  later  aquired  by  China  Light  and  Power  in  2005,  consequently   changing   its   name   to   the   rather   similar   TRU   Energy   because   of  problems  with  Texus  Utilities/TXU  in  the  US.        Consequently,  none  of  combined  DNO/Retailers  established  under  the  privatisation  program  have  retained  their  names  as  retailers,  and  some  of  the  DNOs  have  also  changed   names   after   a   sale   (e.g.   TXU  Networks  were   renamed   SP-­‐AusNet  when  bought   by   Singapore   Power).   All   of   the   incumbent   retailer   names   were   new,  changing  to  an  established  name  when  they  were  on-­‐sold  to  an  existing  retailer.      

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Re-­‐branding   did   therefore   occur   in   Victoria,   but   primarily   long   before   FRC.  When  customers  were  able  to  switch,  they  were  therefore  expected  to  switch  away  from  established,   recognised,   effectively   incumbent   (mostly   transferred   incumbent)  brands.  A  ‘transferred  brand’  is  one  which  has  replaced  an  incumbent  brand  and  in  so  doing  has  effectively  absorbed  the  incumbent  familiarity  of  the  former  brand.  It  would  be  expected  that  such  brands  would  cause  customer  switching  inertia.      It  is  interesting  to  note  therefore,  that  in  this  market  of  powerful  incumbent  brands  has  emerged  world  record  levels  of  customer  switching.  Nowhere  else  in  the  world  have   such   high   levels   of   switching   occurred,   and   this   extreme   switching   has  continued  and  even  increased  since  2002.    Furthermore,  14  players  (none  of  which  control   more   than   one   quarter   of   the   market)   have   managed   to   co-­‐exist   in   this  market  with  now   liberalised   competitive  pricing,   and  when  TXU   re-­‐branded   it   did  not  apparently   suffer  any  greater   losses  as  a   result,   indicating   that  brand  catchup  and   incumbent   branding   are   not   key   determinants   in   the   Victorian   switching  phenomenon.      It   appears   that   in   Victoria,   as   in   Queensland   and   South   Australia,   the   brand  differentiation   between   DNO   and   Retailer   may   have   prevented   any   customer  feelings  of  confusion  as  to  what  would  be  incurred  as  a  result  of  switching  between  retailers,  but  in  reality  the  relatively  minor  historical  differences  between  switching  levels   in   New   South   Wales   and   South   Australia,   can   be   predominantly   credibly  explained   through   price   cap   and   liquidity   issues,   price   shock,   as   well   as   by   the  customer-­‐relationship  strength.   It  would  appear   that   re-­‐branding  was  not  a  major  issue.   In  other  words,  brand  separation  and  brand  quality  do   impact  on  customer  loyalty  and  switching,  but  only  within  the  context  of  a  large  number  of  other,  often  much  more  significant  determinants.      Market  structure  and  price  margins  key  to  Australian  switching  differentials    There  have  been  many  variable   that  have  contributed   to   the  Australian   switching  phenomenon   and   the   differentials   within.   Despite   noticable   differences   in   re-­‐branding   however,   noticable   influences   are   primarily   focused   around   structural  issues  such  as  price  caps.  For  instance,  since  FRC,  Victoria  historically  had  the  most  liberal   price   caps,   followed   by   South   Australia   and   finally   New   South   Wales.  Switching   level   differentials   have   at   times   clearly   reflected   these   price   cap  differentials,   with   increased   price   margins   generally   correlating   with   greater  switching  levels.    In  the  following  graph,  Queensland  is  omitted  due  to  its  ater  FRC  timing.      

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Cameron  O’reilly,   Chief   Executive   of   the   Energy   Retailers   of   Australia   Association  (ERAA),  the  body  that  represents  nearly  all  of  the  energy  retailers  in  the  6  Australian  jurisdictions,  argues  that:    

“Brand  in  some  cases  has  value  for  recognition  and  given  some  customers  will  never  switch.  My  members  however  believe  that  retail  headroom  and  wholesale  liquidity  are  the  greatest  keys  to  competition.  While  compelling  marketing  has  also  been  a  key  pre-­‐requisites  of  success,  it  would  appear  unlikely  that  the  changes  of  utilities  names  played  a  significant  role.”           Cameron  O’Reilly,  Chief  Executive,  ERAA  

The  impact  of  Price  Caps  on  Australian  Switching  Trends  Source:  World  Energy  Retail  Market  Rankings  Report  2010,  VaasaETT  Global  Energy  Think-­‐Tank.  See:  www.utilty-­‐customer-­‐switching.com  

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Europe    In   general   the   more   liberalised   markets   in   Europe   have   experienced,   or   are   due   to  undergo   at   least  minimal   re-­‐branding,   in   order   to   comply  with   EU  wide   requirements.  Typically  this  means  that  customers,  through  the  re-­‐branding  should  be  able  to  be  aware  that  the  retail  and  distribution  parts  of  the  incumbent  utilities  are  unbundled  businesses.  In   practice   however,   unbundling   has   only   been   required   of   medium   and   larger   size  utilities   (typically   over   approximately   100.000   customers   in   size)   and   re-­‐branding   has  typically  meant   that   the   incumbents  make   an   an   addition   to   their   brand   (such   as   the  word   ‘Supply’   or   in   the   case   of   France   by   changing   the   DSO   name   to   ERDF   or   GRDF  instead  of  EDF  and  GDF  respectively).      Some   interesting   national   peculiarities   exist   however,   cases   that   illustrate   how  conditional  and  even  paradoxical  the  impact  of  re-­‐branding  (or  the  lack  of  it)  can  in  fact  be.  A  few  such  cases  and  clarifications  are  given  below.    The  Netherlands  Separated  re-­‐branding   in   the  Netherlands  has  not   taken  place.   It   is   interesting   to  note,  therefore,  that  The  Netherlands  has  experienced  some  of  the  largest  new  market  entrant  success  anywhere  in  the  world,  and  in  2009  was  the  8th  most  active  market   in  terms  of  customer   switching.   In   fact,   in   The  Netherland,   there   is   extensive   evidence   to   suggest  that  negative  image  aspects  associated  with  the  incumbent  brands  has  actually  enhanced  customer  switching  in  the  market,  towards  new  entrands  and  fresh  separated  brands.      Italy  Some   degree   of   re-­‐branding   is   forthcoming   in   2011,   but   the   overwhelming   integrated  ENEL  brand  remains  apparent   for  nearly  all   Italian  consumers,  despite   legal  unbundling  having  taken  place  in  the  market.      Czech  Republic  Voluntarily,  large  regional  utilties,  such  as  DIASOL,  have  re-­‐branded,  but  it  has  only  been  limited.   No   separated   rebranding   has   taken   place.   Furthermore,   there   has   been   no  significant  aparent  impact  on  competition  so  far  from  the  re-­‐branding.      Germany  Since   before   the   time   of   liberalization,   Germany   has   predominantly   been   a  market   of  municipal  owned  Stadtwerke  and  large  national  players  such  as  Vattenfall,  EON,  RWE  and  ENBW.  While  extensive  legal  unbundling  and  some  re-­‐branding  has  taken  place,  from  the  customer  perspective   little  has  changed.   Incumbent  customers  generally  purchase  their  electricity  and  gas  from  related  distribution/retail  brands.      Germany  has  never  been  a  particularly  active  market  in  terms  of  customer  switching,  at  least  not  regarding  residential  and  SME  customers.   Its   level  of  activity  has  ranged  from  Dormant   to  marginally   Active.   In   2009   it   ranked   18th   in   the   global   switching   rankings.  However   in   2008   it   briefly   reached   residential   switching   levels   of   nearly   10   percent,  largely   due   to   rice   hikes,   negative   publicity   and   increased   competitor   marketing.   This  indicated   that   the   maket,   whilst   not   particularly   active,   had   the   ability   to   be   so,  regardless  of  its  current  and  historical  structure.      

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The  Nordic  Markets    The  Nordic  markets  have  experienced  limited,  but  voluntary  re-­‐branding  (since  regulators  generally   have   no   authority   to   order   companiesto   have   separate   branding),   with   no  aparent  evidence  that  re-­‐branding  has  impacted  on  competition  levels.      In  Norway,   there  have  been  a   few  examples  where  the   integrated  supplier  has  changed  name  and  logo  and  become  a  more  or  less  independent  company,  at  least  from  a  branding  perspective.  In  such  examples  the  names  have  changed  completely,  and  so  also  the  logo.  Weather  or  not  customers  are  aware  of  corporate  links  behind  the  branding  separation  is  however,   uncertain.   Observers   in   Norway   generally   believe     that   such   re-­‐branding  may  make  it  easier  for  customers  to  acknowledge  the  difference  between  the  companies,  but  doubt   that   incumbent   retailer   neutrality   or   advantage   has   been   compromised.   Despite  this,  Norway  has  one  of  the  highest  switch  rates  in  Europe  and  has  long  been  recognised  as  one  of  Europe’s  most  competitve  markets.    In  Finland,  while  unbundling  and  some  degree  of  separated  re-­‐branding  has  been  followed  by  some  of  the  larger  incumbents  in  the  markets,  the  largest  incumbents  such  as  Fortum,  Vattenfall   and   Helsinki   Energy   have   retail   brands   which   remain   clearly   and   strongly  related.   Small   incumbents   have   generally   neither   unbundled   nor   applied   separated   re-­‐branding.   There   have   been   calls   for   separated   unbundling   in   Finland   as   a   means   for  enabling  and  encouraging  greater  levels  of  switching  in  what  has  been  only  a  moderately  active  market  for  customer  switching.   It   is   interesting  to  note  however,  that  on  average,  the  unbundled   incumbents  that  have  applied  separated  re-­‐branding,  have  been  some  of  the  most   succesful   at   winning   new   customers   (although   the  most   successful   appear   to  have  been  the  new  players  in  the  market),  ironically  largely  from  the    incumbent  utilities  that  have  not  applied  separated  re-­‐branding.      Sweden   has   largely   followed   a   course   similar   to   Finland,   while   experiencing   somewhat  higher   levels   of   switching   activity.   Denmark,   which   has   experienced   no   significant  separated   re-­‐branding,  has  now   reached  a   level  of   switching  which   is  on  a  par  with   the  other  nordic  markets.    In  Iceland,  as  illustrated  in  the  following  table,    there  has  been  some  seprated  re-­‐branding,  but  switching  levels  have  been  very  low  and  far  lower  than  the  other  Nordic  markets.    When   looking   at   switching   in   the   Nordic   markets,   the   levels   and   differentials   between  markets  can  largely  be  explained  by  a  number  of  key  factors.  Research  by  Ariu  et.  al  (2010)  analysed  the  reasons  for  switching  differentials  in  Finland,  Sweden,  Norway  and  Denmark.  Each  market  was  then  given  a  score  according  to  the  degree  to  which  it  conformed  to  each  key  identified  switching  determinants.        

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By  adding  up  the  combined  scores  for  each  market  a  switching  pre-­‐disposition  score  was  derrived  for  each.  The  4  scores  that  were  derived  (one  for  each  market)  almost  exactly  matched   the   relative   switching   levels   in   each   of   those   markets,   indicating   that   the  identified   list   of   determinants   of   switching   were   indeed   the   key   drivers   of   switching.  Differentials  in  separated  branding  were  not  identified  as  a  determinant.    

Source:  Icelandic Energy Market Authority (2010)

Key  Determinants  of  Nordic  Customer  Switching  Differentials  Source:  Ariu et. al (2010)

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France  EDF,  the  national  electricity  incumbent,  used  to  be  an  integrated  utility  brand,  but  was   re-­‐branded   into   ERDF   (for   distribution)   and   EDF   (for   retail).  Most   consumers  are  however  unaware  of  the  re-­‐branding  or  at  least  still  see  the  two  entities  as  part  of   the   same   business.     The   company   has   not   been  clearly  communicating  it  to  the  customers  and  ERDF  is  100%  owned  by  EDF.   It   is   a  different  entity,   but   they  have   not   differentiated   themselves   from   EDF.   For  example,  once  a  bill  is  sent,  it’s  billed  by  EDF  but  then  it  goes   to  ERDF.    Right  now  a  campaign   is  ongoing   to  try   and   differentiate   themselves,   but   as   far   as   the  impact  goes,  it  does  not  appear  to  have    had  much  of  an  impact  at  all,  at  least  so  far.    For   the   gas   market   the   situation   is   the   same,   with  GDF,   the   incumbent   rebranded   into   GRDF   (for  distribution)   and   GDF   for   Retail.   Additional   re-­‐branding  has  taken  place  with  the  addition  of  the  Suez  name  to  branding,  following  the   merger   of   GDF   and   Suez,   but   this   has   not   affected   the   separation   of   the  incumbent  brands.        Portugal  The  need  to  differentiate   the   image  of  network  operators  and   last   resort   supplier  from  one  another  and  in  relation  to  all  the  other  entities  operating  in  the  electricity  and  natural  gas  sectors   is   increasingly  seen   in  Portugal  as  an   important   feature  of  the  legal  obligation  to  separate  the  activities  of  vertically  integrated  companies.  The  regulation  approved  by  ERSE  (the  Portuguese  national  energy  regulator)  in  this  area  reiterates  the  obligation  to  provide  codes  of  conduct,  set  up  autonomous  websites  and  present  a  proposal  with  a  view  to  distinguishing  their  images.    Extensive   re-­‐branding  has   though  not   yet   taken  place,   and   the  obligations  do  not  appear  to  require  rebranding  that  would  prevent  customers  from  realising  that  the  separated  legal  entities  (following  legal  unbundling)  are  part  of  the  same  ownership  bundled   entity,   that   entity   that   they   are   incumbent   customers   of   (directly   or  indirectly).    Slovenia  There   has   been   no   obligation   to   rebrand   in   Slovenia.   The   incumbent   utilities  companies   still   use   the   same  names,   though   some  have   changed   their   logos   to   a  minor  extent.  Gas  utilities  are  too  small  (under  100  000)  to  be  forced  to  unbundle  the   incumbent   DSO   from   the   incumbent   supplier   and   thus   they     have   not  rebranded.    New  separate  national  DSO  company  was  formed  in  2007  (to  control  all  DSO  business  in  Slovenia),  with  a  new  separate  brand/name/logo,  but  this  company  has  no  assets  and  thus  contracts  with  the  former  distribution  companies  -­‐     the  de  facto   operators   and   network   owners,   and   suppliers   in   one.   From   the   incumbent  customer’s  point  of   view   therefore,   they   still   obtain   their  electricity  and  gas   from  the   same   integrated   utilities.   Despite   this   absence   of   separative   re-­‐branding  however,  Slovenia  is  a  market  with  an  active  level  of  customer  switching.  

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Great  Britain  Great   Britain   is   quite   a   unique   case.   While   it   has   an   extensivly   liberalised   and  unbundled  market   for   Electricity   and   Gas,   at   the   time   of   full   market   liberalization,  between   1996-­‐1999,   customers   were   not   aware   of   any   separation   between  distribution  and  retail.    In   the  gas  market,   first   to   liberalise,   the  name  division  between  British  Gas  Transco  (gas  distribution)  and  British  Gas  (the  commonly  recognised  name  of  the  retailer),  was  irrelevant  to  customers  who  simply  thought  of  the  entire  business  as  British  Gas.    A  similar  picture  was  the  case  in  each  of  the  REC  (regional  electricity  company  –  the  regional  electricity  incumbents)  jurisdictions  during  electricity  market  liberalization.    The   situation   in   Great   Britain   was   made   even   more   extreme   by   the   fact   that  customers  only  have  a  relationship  with  their  electricity  or  gas  retailer.  The  retailer  in  turn   deals   with   all   other   entities   in   the   delivery   chain,   including   distribution.    Customers   are   consequently   typically   only   only   aware   of   the   name   of   their   energy  retailer.      There  has  been  extensive   re-­‐branding   in   the  Great  Britain   energy  market,   not   least  because  most  utilities  have  been  purchased   (and   subsequently   re-­‐branded)   at   least  once   since   the   late   1990’s.   This   re-­‐branding   had   not   however,   had   any   significant  impact   on   the   level   of   switching   in   the  market.   Indeed   levels   of   switching   in  Great  Britain,   historically   Europe’s  most   active   energy  market   for   both   gas   and   electricity  (until  taken  over  by  Ireland  in  2009),  have  changed  little  since  1999,  despite  extensive  branding  and  structural  changes  in  the  market.  

 It   should  be  noted   though,   that  most  switching   in   the  UK,  where  over   50%  of   customers   have   switched   retailer,  has   taken   place   between   one  current/former   incumbent   in   the  market   and   another,   or   between  British   Gas   (former   gas   market  incumbent)   and   one   of   the   former  RECs.    Consequently   the   vast   majority   of  

customers   in   the  market   remain   with   one   or   another   former   incumbent,   although  other  well  known  retailers,  such  as  Tesco,  have  made  strong  headway  into  the  market  as  retail  affinity  brands.      The  case  of  Great  Britain  would  arguably  suggest  that  separated  re-­‐branding  is  far  less   significant   than   brand   familiarity   and   strength.   Any   player   and   brand   that   is  trusted  can  win  large  numbers  of  customers  in  the  market.    

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New  Zealand    When   full   deregulation   occurred   in   New   Zealand   on   1   April   1999,   monopoly  distribution  and  competitive  retail  businesses  were  required  to  separate,  and  name  changes   as   a   result   of   this   unbundling   did   occur   at   that   time.   In  most   cases   the  distribution  company  retained  the  name,  and  the  retailer  businesses  that  were  sold  were  purchased  and  as  a  result  of  that  purchase  were  renamed.      Since   then,   changes   to   any   participants’   business   name   has   not   been  mandated,  although  as  a  result  of  sales  of  distribution  company  assets  or  a  retailers  consumers,  this   has   occurred.  In   the   event   of   a   distribution   company   selling   assets,   provided  that  all  of  the  asset  are  sold,  a  change  to  the  participants  name  is  not  required,  but  where   it   is  a  partial  asset   sale   it   is,   to  assist  market   systems   to   trace   transactions  accurately.    New   Zealand   is   one   of   the  world’s  most   active  markets,   ranking   5th   in   the  World  Energy  Retail  Market  Rankings.  Observers  in  the  New  Zealand  market  feel  that  the  re-­‐branding   that   has   taken   place   has   not   had   a   significant   impact,   in   either  direction,  on  the  level  of  customer  switching.    

USA  -­‐  Texas  In  the  USA  only  New  York  and  Texas  can  be  considered  liberalised  energy  markets,  and  of  these  only  Texas  can  be  considered  a  market  comparable  in  context  to  any  of  the   european   markets,   since   the   style   of   liberalisation   and   the   consequences   of  choice  in  the  NY  energy  market  is  fundementally  different  to  that  of  Europe.    Texas,   the  6th  most  active  market   in  2009,  more  active  than  all  European  markets  other   than   Ireland  and  Great  Britain,  has  undergone  extensive   structural  business  separation  (unbundling),  to  the  point  where  most  customers  are  only  aware  of  the  retailer   from   whom   they   purchase   their   energy.   Incumbent   re-­‐branding   has  essentially   not   taken   place,   however,   although   Texas   has   more   competing   new-­‐entrant  retailers  than  any  other  energy  market  in  the  world.      The   two   largest   competitors   in   the   market,   TXU   Energy   (the   leading   former  incumbent,  Texas  Utilities,  essentially  dating  back  to  1882)  and  Direct  Energy  (a  new  start   up   dating   back   to   1985)   have   very   different   backgrounds.   Since   FRC  (liberalisation)   commenced   TXU   has   however,   essentially   maintained   its   brand.  Direct  Energy,  a  company  owed  by  the  UK’s  Centrica  (the  owner  of  British  Gas)  has  managed   to   win   6   million   customers   around   the   USA   through   organic   customer  wins  and  customer  base  acquisitions.      Texas   is   a   good   example   of   the   importance   of   branding,   but   the   aparent  insignificance  (or  at  least  low-­‐significance)  of  incumbent  re-­‐branding.    

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     SwitchStats  Australia    

The  Switchstats    Australia  Scheme  is  a  collaboration  between  the  VaasaETT  Global  Energy    Think-­‐Tank  and  10  Australian  energy  retailers  representing  over  80%  of  electricity  customers  and  90%  of  gas  customers  in    Victoria,  New  South  Wales,  Queensland  and  South  Australia.    The  collaboration  is  conducted  in  partnership  with  the  Energy  Retailers  Association  of  Australia  (ERAA)      VaasaETT  collects  switch  data  directly  from  the  retailers,  according  to  a  strict  and  consistent  methodology  and  definition,  in  compliance  with  the  same  definition  used  with  the  Utility  Customer  Switching  Research  Project  (see:    www.utility-­‐customer-­‐switching.com).  This  is  based  on  the  same  definition  (by  Dr  Philip  E.  Lewis)  used  by  the  European  Union  regulators,  and  therefore  allows  direct  comparison  against  switching  data  from  all  European  markets  as  well    as  fully  liberalized  markets  in  the  USA  and  Canada.      For  more  information  on  members,,  methodologies  and  definitions,  please  contact    Dr  Philip  E.  Lewis    at  Philip.lewis@vaasaett.ccom    

The  Utility  Customer  Switching  Research  Project  The  Utility  Customer  Switching  research  project,  founded  jointly  in  2004  by  Dr  Philip  E.  Lewis  and  Paul  Grey,  monitors  switch  rates  and  trends  in  all  fully  liberalised  energy  retail  markets  worldwide.    It  was  the  first  and  remains  to  this  day  the  only  global  view  of  utility  customer  switching  activity,  as  well  as  being  the  most  comprehensive  and  uniform  source  of  comparable  switching  statistics  in  the  electricity  and  gas  markets  worldwide.      It  also  provides  ever-­‐increasing  analysis  of  observed  trends  and  explanations  for  utility  customer  switching  behavior.  Some  of  this  information  is  provided  free  or  through  subscription  services  to  our  network  members,  additional  insight  is  provided  through  client  offerings.    More  Information  at:  www.utility-­‐customer-­‐switching.com  

Members  of  SwitchStats  Australia    

• Australia  Power  &  Gas  • Momentum  Energy  • Energy  Australia  • Simply  Energy  • Victoria  Electricity  • Country  Energy  • Integral  Energy  • Origin  • AGL  • TRU  

     

Note:  Victoria  Electricity  Includes  Victoria  Electricity,    South  Australia  Electricity,  Queensland  Electricity,  New  South  Wales  Electricity.    

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References     Reviewed  Reports  and  Journal  Articles:    Forthcoming:  Lewis,  Philip  E.  (2010),  ‘World  Energy  Retail  Market  Rankings  5th  Edition’,  Utility  Customer  Switching  Research  Project,  Published  by  VaasaETT,  September  2010    Ariu,  Toshio,  Philip  Lewis,  Hisanori  Goto,  Christophe  Dromacque  and  Jessica  Strömbäck  (2009),  Electricity  Market  Reforms  in  the  Nordic  Countries  –  Historical  Evolution  and  Differences  in  Customer  Choice  Behavior.  Central  Research  Institute  of  the  Electric  Power  Industry  of  Japan  (CRIEPI),  Report  Number  YO8036,  March  2009.    Capgemini  (various  authors)  and  Lewis,  P.E.  (2009),  European  Retail  Markets  (especially  focusing  on  customer  switching  behaviour)  in  the  European  Energy  markets  Observatory,  11th  Edition,  Cap  Gemini,  November  2009.    Lewis,  Philip  E.  (2008),  ‘World  Energy  Retail  Market  Rankings  4th  Edition’,  Utility  Customer  Switching  Research  Project,  Published  by  First  Data  &  VaasaETT,  July  2008.    Lewis,  P.E.  (2006),  A  Universal  Indicator  of  Customer  Switching  Activity,  Public  Report  Written  for  Finnish  Energy  Market  Authority,  Ref:  VEMG-­‐EMV-­‐UICS-­‐01-­‐06,  VaasaEMG,  University  of  Vaasa,  January,  2006.    Lewis,  P.E.,  M.  Pakkanen,  T.  Närvä,  L.  Hernesniemi,  J.  Partanen,  S.  Viljainen,  S.  Honkapuro,  K.  Tahvanainen  and  R.  Jylhä  (2006),  ”Selvitys  sähkö-­‐  ja  maakaasumarkkinoiden  kehityksestä  sekä  sähkö-­‐  ja  maakaasumarkkinalakien  soveltamisesta  saaduista  kokemuksista”  (Evaluation  of  the  impact  of  energy  law  developments  on  the  Finnish  Gas  and  Electricity  markets),  Finnish  Ministry  of  Trade  and  Industry  (Kauppa-­‐ja  teollisuusministeriö),  ISBN:  978-­‐952-­‐489-­‐103-­‐5    Olsen,  Ole  Jess;  Johnsen,  Tor  Arnt  &  Lewis,  Philip  E.  (2006).  A  Mixed  Nordic  Experience:  Implementing  Competitive  Retail  Electricity  Markets  for  Household  Customers.  The  Electricity  Journal,  November  2006,  Vol.  19,  Issue  9,  pp.  37-­‐44.    Grey  P.,  Lewis  P.E.,  and  Griffin  J.  (2005),  ‘utility  customer  switching  in  the  Netherlands  &  Belgium  –  Utility  Customer  Switching  Research  Project,  Published  by  First  Data  &  VaasaEMG,  November  2005.    ERGEG  and  Lewis,  P.E.  (2005),  ERGEG  Report  on  The  Customer  Switching  Process,  Ref:  E05-­‐CFG-­‐02-­‐06,  30  September  2005,  European  Regulators  Group  For  Electricity  and  Gas  (ERGEG).    Lewis,  P.E.  (2005),  Retail  Switching,  A  Global  Phenomenon  in  Edwardes-­‐Evans,  H.  and  M.  Burdett  (eds.),  ‘European  Electricity  Review  2005’,  Platts,  McGraw-­‐Hill,  UK,  June  2005.    Lewis,  P.E.,  P.  Grey  and  J.  Griffin  (2005),  Energy  Retail  market  Success,  A  Global  Experience,  Spark,  Public  Utilities  Fortnightly,  USA,  June  2005,  pp.3-­‐6.    Lewis,  P.E.,  M.  Pakkanen  and  M.  Muroma  (2004)  “The  Electricity  Customer’s  Lot  –  The  status  of  the  deregulated  Finnish  electricity  market,  consequences  for  the  customer”  Finnish  Ministry  of  Trade  and  Industry  (Kauppa-­‐ja  teollisuusministeriö),  ISBN:  951-­‐739-­‐805-­‐0.      

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Lewis,  P.E.  and  J.  Leppanen  (2004),  “Understanding  the  link  between  service,  loyalty  and  profitability  in  competitive  energy  markets”  in  Edvardsson,  B.,  Gustafsson,  A.,  Brown,  S.W.  and  R.  Johnston  (eds.),  Quis  9:  Service  Excellence  in  Management:  Interdisciplinary  Contributions,  Karlstad  University  Press,  ISBN:  91-­‐85019-­‐81-­‐X.    Lewis,  P.E.  (2004),  “Sticking  With  You””  Power  Economics,  Volume  8,  Issue  3,  ISSN  1367-­‐1707,pp24-­‐25.    Lewis,  P.E.  (2003),  “Finland  –  the  end  of  competition  as  we  know  it?”  in  the  European  Electricity  Review  2003,  Platts,  McGraw-­‐Hill.    Perrels,  A  and  P.E.  Lewis  (2003)  “The  resurgence  of  DSM  and  the  role  of  branding  in  power  markets”  in  the  proceedings  of  ECEEE  (European  Council  for  an  Energy  Efficient  Economy)  2003  Summer  Study  conference,  St-­‐Raphael,  France.    Lewis,  P.E.,  (2002),  “The  Mind  Behind  Loyal  &  Valuable  Relationships”  in  the  Energyforum  Global  Report  on  Deregulated  Electricity  Marketing,  Energyforum  International  AB,  pp:6-­‐19.    Lewis,  P.E.,  T.Burnett  and  M.Boys  (2002),  “Achieving  Efficient  Relationship  Marketing  Value  –  The  Role  of  Satisfaction  &  Loyalty  Measurement”  in  the  Energyforum  Global  Report  on  Deregulated  Electricity  Marketing,  Energyforum  International  AB,  pp:154-­‐167    Bönsch,  C.  and  P.E.  Lewis  (2002),  “Kundenverständnis  als  Schlüssel  für  erfolgreiches  CRM  (Customer  understanding  as  a  key  for  successful  CRM)”,  in  Elektrizitätswirtschaft  EW  das  magazin  für  die  energie  wirtschaft,  Issue  9,  2002,  VWEW  Energieverlag,  ISSN  0013-­‐5496  –  D  9785  D.    Lewis,  P.E.  (1998),  “Successful  and  Unsuccessful  Marketing  Strategies  in  the  UK  and  Nordic  (except  Finland)  Gas  and  Electricity  Markets”,  VaasaEmg  Report,  5/1998.      Additional  Sources  Interview  and  Data  Sources:    

1. Innovación  y  Estudios  Eficiencia  Energetica,  Gas  Natural    Soluciones  (Spain)  2. Norwegian  Water  Resources  and  Energy  Directorate  3. ERSE  (Portugal)  4. Orkustofnun  National  Energy  Authority  (Iceland)  5. De  Energiezaak  (The  Netherlands)  6. CWAPE  (Belgium    Wallonia)  7. Vlaamse  Reguleringsinstantie  voor  de  Elektriciteits-­‐  en  Gasmark  (Belgium  –  Flanders)  8. Energy  Agency  of  the  Republic  of  Slovenia  9. RAE  (Greece)  10. The  Regulatory  Authority  for  Electricity  and  Gas  (Italy)  11. Institut  Luxembourgeois  De  Regulation  Service  Energie  (Luxembourg)  12. E-­‐Control  (Austria)  13. Energetický  regulační  úřad  (Czech  Republic) 14. Cameron  O’Reilly,  Energy  Retailers  Association  of  Australia  (ERAA) 15. David  Lipshut,  Energy  Reform  Consulting  Pty  Ltd.  (Australia)  16. Ron  Beatty,  Electricity  Commission  (New  Zealand)  

 

 

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About  The  VaasaETT  Global  Energy  Think-­‐Tank  

The  VaasaETT  Global  Energy  Think-­‐Tank  shares,  develops  and  envisions  best  practice  for  the  global  utilities  industry  through  a  network  of  thousands  of  senior  executives,  officials,  researchers  and  other  experts  who  are  for  the  most  part  known  and  trusted  personally.  We  follow  a  unique  3×5  concept  based  five  principles  and  five  services  in  five  inter-­‐dependent  focus  areas:    Five  Principles  1. Knowledge  through  collaboration  (No-­‐one  has  all  the  knowledge.  Through  

discussion  and  knowledge  sharing  we  all  become  stronger  and  can  find  solutions  together)  

2. Value-­‐for-­‐all  3. Independence  of  opinion  4. Environmental  consideration  5. Fresh  thinking    Five  Services  1. Networking  2. Collaborative  projects  3. Business  facilitation  4. Research  5. Consulting    Five  Focus  Areas  1. Marketing  and  Competition  2. Customer  Psychology,  behaviour,  loyalty,  value  and  profitability  3. Market  Structures  and  Drivers,  4. Smart  Grid,  Smart  Home  and  Demand  Response  5. Innovation    More  Information  at  www.vaasaett.com